MARKETS AND INSTITUTIONS

Presented By:

Ibadat Miglani(18020325)
Kanika Lohan(18020258)
Sakshi Yadav(18020254)
Swapnil Chittor(18020287)
Tanya Chauhan(18020243)
 CANADA
MACRO-ECONOMIC INDICATORS CHOSEN:

• NET-TRADE
• EXPORTS
• IMPORTS
• UNEMPLOYEMENT
• INDUSTRY GROWTH RATE
 • GDP increases when there
is trade surplus
• If domestic consumers
spend more on foreign
products than domestic
producers sell to foreign
consumers – a trade deficit,
then GDP decreases
• trade surpluses are
contributions and trade
deficits are "drags" upon
their nation's GDP.

NET TRADE
 • Canada’s trade deficit widened to approximately 23
billion within the last 20 years
• It was the largest trade shortfall on record, as exports
dropped 3.8 percent imports rose 1.6 percent
NET TRADE IN CANADA • The country trade gap narrowed to CAD 4.6 billion in
2016.
• Current net trade in good and service in Canada is
-4.0255 USD.
 Big rise in the US dollar against almost every
currency, which has a big impact on Canada’s
trade-weighted exchange rate

A massive decline in the international price of oil,

REASONS FOR one of Canada’s biggest source of export earnings
TRADE
DEFICIT Increase in purchases of energy products

Reductions in the Bank of Canada’s policy rate fall

the most level since 2009, partly in response to
the expected impact of the change in the oil price
 • GDP increases when there
• Total amount
is trade of goods and services
surplus
produced at home and sold abroad.
• If domestic consumers
spend more on foreign
productsasthan
• It is reported domestic
percentage of GDP so that
we can producers sell to
evaluate their foreign relative to
magnitude
consumers – athe
the size of trade deficit,
economy.
then GDP decreases
• If•exports
trade are about 15
surpluses percent or less of
are
GDP,contributions
the economy isand
considered
trade relatively
close as are
deficits only"drags"
15 percent are sold
upon
internationally.
their nation's GDP.

NET TRADE
EXPORTS
 • Exports in Canada averaged 437.92 CAD Billion from 1990 until
2016
EXPORTS IN • All-time high of 632 CAD Billion in 2016 and a record low of 170
CAD Billion in 1991.
• Main exports:
CANADA • energy products (17 percent); motor vehicles and parts (17
percent); consumer goods (13 percent); metal and forestry
products and building and packaging materials (8 percent); basic
and industrial chemical, plastic and many more.
Reasons New legislation on cross-border trade with the United
States supported the growth in manufacturing exports
For
Increase/Decr
REArrrdfggrS
ONS
ease RFOR In 2001, China joined the World Trade Organization. As a
global commodities boom occurred, strengthening the
demand for oil and other primary commodities
TRADE
in produced in Canada.

DEFICIT
EXPORTS In early 2000s, global oil prices began to increase
sharply, while new advancements in extraction
technologies made it more commercially viable to
produce oil using non- conventional extraction methods,
such as those used in western Canada's oil sands.
 • GDP increases when there
• Total amount
is trade of goods and services
surplus
produced abroad and sold at home.
• If domestic consumers
spend more on foreign
productsasthan
• It is reported domestic
percentage of GDP so that
we can producers sell to
evaluate their foreign relative to
magnitude
consumers – athe
the size of trade deficit,
economy.
then GDP decreases
• When a country
• trade importsare
surpluses goods, it buys them
from foreign
contributions producers.
and trade
deficits are "drags" upon
• Thetheir
money spent on
nation's imports leaves the
GDP.
economy, and that decreases the importing
nation's GDP.
NET TRADE
IMPORTS
 • Imports in Canada averaged 342 CAD Billion from 1990 until 2016
• All-time high of 536 CAD Billion in 2015 and a record low of 135
IMPORTS IN CAD Billion in 1991.
• Main imports:
CANADA Consumer goods (22 percent of total imports); motor vehicles and
parts (20 percent); electrical equipment (12 percent); industrial
machinery,; basic and industrial chemical, plastic and rubber
products (8 percent); metal and non- metallic mineral products (8
percent) and energy products (6 percent).
 The appreciation of the Canadian dollar
Reasons may have induced a shift towards
cheaper foreign sources of supply
For
REArrrdfggrS
Increase/De
ONS RFOR A shift in demand towards particularly
TRADE import-intensive components
crease in
DEFICIT
IMPORTS competition from emerging-market
economies like China
 • Unemployment or joblessness is
a situation in which able-bodied
people who are looking for a job
cannot find a job.
• 1 percent decrease in GDP has
been associated with a slightly
less than 2-percentage-point
increase in
the unemployment rate.
This relationship is usually
referred to as Okun's law.
• Total employment equals the
labour force minus the
unemployed, so there is a
negative relationship between
output and unemployment
(conditional on the labour force)."

UNEMPLOYMENT
 • The unemployment rate in Canada was at 5.8
percent in March 2019.
• Unemployment Rate in Canada averaged 7.64
Unemployment in percent from 1966 until 2019, reaching an all time
Canada high of 13.10 percent in December of 1982 and a
record low of 2.90 percent in June of 1966.
 A higher proportion of seasonal industries.

taxation is very high on the totem pole.

Reasons for
Unemployment
Manufacturing has always been a smaller proportion
of their economy than more developed nations.

Canada could be more open to investments from

other countries, open the doors to educated foreign
individuals especially those with skills to contribute to
future growth of Canada.
 • GDP increases when there
is trade surplus
• If domestic
• A growth consumers
industry is the sector of the
spendexperiencing
economy more on foreign
a higher-than-
products
average than domestic
growth rate.
producers sell to foreign
consumers
• Their growth – a trade
is related deficit,demand
to consumer
thenproducts
for new GDP decreases
or services that firms
within the industry
• trade are beginning
surpluses are to offer.
contributions and trade
deficits are "drags" upon
their nation's GDP.

NET TRADE
INDUSTRY GROWTH RATE
 Industrial Production in Canada increased 4.20 percent in
INDUSTRIAL GROWTH IN October of 2016 over the same month in the previous
year. Industrial Production in Canada went into negative
CANADA and fell.
 Canadian companies have moved production offshore,
in particular to countries with lower labor costs.

Reasons For
Increased efficiency in goods production alongside
Industrial rising relative demand for services as incomes increase
Growth
It is sensitive to shorter-run fluctuations in
competitiveness relative to other jurisdictions.
 RECOMMENDATIONS
• Investment in human capital, skills and knowledge, through education and
training which improves the performance of the workforce by enabling them to
do more complex and more productive tasks.
• Total factor productivity can increase either because people develop new ideas,
whether for new products or for new production.
• Reduce regulations that impose an extra load on businesses and residents. Tax
cuts and tax rebates will put more money back into the pockets of consumers.
• Ideally, these consumers spend a portion of that money at various businesses,
• More cash means businesses have the resources to procure capital, improve
technology, grow and expand.
• Strategic immigration reform by letting the skilled immigrants stay in the country.