Key Macro-Economic Indicators Data of Canada Assignment Help

Each student will research and assess one country according to the criteria listed below. Students will determine appropriate responses to the questions provided and summarize their findings.

In your essay, you will consider and address the following questions and points: 

What is the current state of the economy that you have chosen? Collect the latest available data on nominal GDP, real GDP, per capita real GDP, unemployment rate, inflation rate, interest rates, exchange rate(s), and any other important macroeconomic data. Is the country experiencing an inflationary gap or a recessionary gap?  What kind of macroeconomic policy should this country follow?  Is the real GDP growing and at what rate?  What is the per capita real GDP on Purchasing Power Parity basis? What is the trend in this variable? Is the per capita real GDP increasing? Can you find the relevant data for the last couple of years or more?  Is the current unemployment rate close to NAIRU? Higher or lower?  At what stage of the Business Cycle is this country presently in? Is there an inflationary or recessionary gap? What kind of fiscal and monetary policies is this country presently following? Expansionary or contractionary?  What kind of exchange rate policy is this country presently following? Fixed exchange rate or flexible exchange rate?  How is this country’s economy going to perform in the coming years? What does the future look like? Will the unemployment rate and inflation rate change? Why or why not? 

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1. Introduction

Canada is one of the richest countries in this planet and it has a high class in standard of living with a intricate economy. This assignment is going to clarify and detail about Canada's current economic state, it's GDP (nominal), unemployment rate in the country, rates of interest, rates of inflation, rates of exchange, per capita GDP (real), monetary and fiscal policies, data related to macroeconomic policies and certain other factors and feature of Canada's economy (Chen et al., 2012, p. 12). Canada is a country with mixed economy and has the 10th largest nominal GDP along with 16th largest GDP in the world of purchasing power of parities. Additionally, GDP growth rate of Canada in 2018 is by 1.8%, inflation rate is 2.4% in 2018 and unemployment rate is 5.8% on 2019.

2. Analyzing Current Economy of Canada

The Canada's economy is growing in a fast pace in this developed world. The countries GDP is growing but on 2018 it was seen that the country's economy was in a weak situation. This year on 2019, the rate of growth of economy is moderate with high rates of interest reducing the domestic demand (Chen et al., 2012, p. 12). On the four quarter it was seen on 2018 that GDP growth was lagging. On the present year 2019 the economy is believed to increase by 2%. The conference board of Canada expects the GDP to grow by 2% in 2019. Canada's economy is facing obstacles moving towards 2019. The consumer's expenditure has driven the economic growth on the previous years; at present year it is observed that the people's Canada has restricted their expenditure (Coalition's, 2018, p. 02). The economic growth this year will depend on the investments in business and the performance of the sector related to non-energy trade. The investment on energy will remain frail this year. The business investment will remain marginal this year.

2.1 Evaluating Diversified Data of Canada

Analyzing all the data related to Canada's economic growth. The real gross domestic product or the GDP slowed to 0.1% in the fourth half of the year, it relates to the pace seen on second part of the year 2016 (Coalition's, 2018, p. 02). The real gross income of the nation fell 1.0%. The final domestic demand reduced to 0.4% as the investment started to reduce. Comparing to US the real GDP grew in US by 2.9% in the year 2018. The unemployment rate was 5.6% in November 2018 in addition the wage growth also remains low. The fall down in price of the oil and capacity of pipeline is hitting hard on Canada's energy sector (Mróz, 2012, p. 198). The real GDP (expenditure) increased by 0.1% in the fourth quarter of 2018. The GDP per capita was $48,612 (the nominal GDP, 2019) and $51,556 (PPP in 2019). The inflation rate of Canada was 2.4% on October 2018. The GDP of different sectors like in agriculture was 1.6%, industrial 27.7% and related to service was 70.7%.

3. Analyzing the Current situation of Canada

The economy always faces an inflation gap when the output is very lower than the expected. The inflationary gap is the difference between the potential GDP and the real GDP at the employment level (Mróz, 2012, p. 198). This gap is also called as recessionary gap. The real GDP is always more than the potential GDP. Inflation rate is low in Canada since 2008 at a level of 1.3%. Inflation of Canada in the year 2012 was 1.52%. The annual inflation rate in Canada deduced to 1.4% in January 2019 from 2.0% in the previous time. In 2018 the inflation rate was 2.57% and the present rate is 2.23, on 2020 it is predicted to be 2.1%, in the financial year 2021 inflation rate might be 2.11%, on 2022 the rate might be 2.08%.

4. Explaining Macroeconomic Policy of Canada

The Canadian Macroeconomic policy uses the principles of the macroeconomics to understand the issues of this policy. Cost of inflation and unemployment issues comes under this policy (Tugcu, Ozturk, & Aslan, 2012, p. 1943). The main intension of the macroeconomic policy is to meet the objectives of the economy of every country. Accordingly, in this specific section, the macroeconomic policies of Canada are to be discussed. On the basis of macroeconomic policy of Canada, the overall policy supervises five specific fields those are stability of price, full employment to the people, growth of the economy, payments equilibrium stability and social objectives of that specific country. The specific fields are stated below:

I. Stability of Price: Stability of price is one of the specific fields that are excessively monitored by the macroeconomic policies of Canada. In this section, the macroeconomic policy monitors the unchanging price level (Hamit-Haggar, 2012, p. 359). Enhancement of price is not an adequate marketing strategy and therefore, it also hampers the organizational tactics. On the other hand, it can be stated that fluctuation of the prices are not welcomed appropriately within the country and it hampers the economic growth of the country.

II. Economic growth: These are the major sources of the economic growth capital formation, progress regarding the technology and the development of labor force. A nation like Canada always wants to gain economic growth over a long time because it would lead to high standard of living and increase in quality of life of the commoner's. The economic growth falls or degrades due to low average output. It can be said that the policy of macroeconomics would increase economic growth with the sensible stability in price.

III. Payment equilibrium and stability rate of exchange: macroeconomics shows that transaction (international) differs from transaction related to domestics in exchanged of currency (foreign) (Baldwin et al., 2012, p. 991). The country always wants to balance the services and the flow in goods. The increase in export of a country leads to equilibrium in payments and reserve accumulation likewise the foreign and the gold exchanges.

5. Growth of Real GDP in Canada

The Real GDP in Canada along the years is as follows, in 2007 the value of real GDP was 2.1, in the year 2008 the value of real GDP was 1.0, which brings changes around -51.53%. Where, in 2009 the value decreased to -3.0 which bring changes to -395.00%. Accordingly in 2010 the value enhances to 3.1 which brings changes to -204.51%. In the year of 2011 the value was 3.1 which display the changes to 1.88%. In the year 2012 the value was 1.7 that brings changes to -44.41% in 2013 the value was 2.5 which generates the changes to 41.45. Simultaneously, in more growth was seen in 2017, where the value was 3.0 which bring changes near about 115.49% (Bataille & Melton, 2017, p. 119). However, in the yare 2018 the value decreases to 2.1 that decreases the value of change to -32.20%.

6. Per Capita Real GDP on Buying Power Parity Basis

From the financial year of 2009 to 2018 it is to be seen that the per capita GDP on PPP is increasing in tremendous manner. In the financial year of 2010 the real GDP per capita PPP was 40699.3551, where in 2012 the real GDP per capita PPP increases to 41794.5389. Accordingly, in 2014, another growth was seen that was 43079.1425. However, from the financial year of 2014 to 2016, the growth of real GDP per capita PPP did not grow tremendously. In the financial year of 2017, an effective and tremendous growth within real GDP per capita PPP was seen that was 44017.59.Based on the report of real GDP per capita PPP, it can be stated that the growth of real GDP per capita PPP is increasing in tremendous manner.

7. Analysis of Current Unemployment Rate

The rate of unemployment in Canada in 2019 stood at 5.8%. In the financial year of 2019, it is to be seen that since October, 2018 a large numbers of people that is near about 55.1 thousand came to Canada for work purposes (Kot & Hendel, 2012, p. 346). According to the data of 2018, in the months of April, May and June the unemployment rate was 5.8%. However, the rate of unemployment in Canada on July, August and September was 5.8% to 6%. The same unemployment rate is seen in the year of 2019 where the unemployment rate is still low in Canada.

8. Performance of Canada's Economy in Future

The economic condition of Canada in 2017 helps the country to lead within G-7 countries with an exceptional GDP growth of 3.0%. Analyzing the entire topic it can be summarized that Canada's economy is growing and will grow in a slow and a sustainable manner in the near future.

9. Conclusion

In summary, analyzing the whole report it is seen Canada is presently growing in a slow and sustainable manner and will grow in the future. In the near future due to advancement in Canada's technology, business and global market the economy will surely grow. But to have a fast paced growth the government should take advance steps to help the economy to growth. The organization in the country must collaborate with the government for betterment of Canada's economy in all aspects. And in the near future Canada might come out to be the greatest country in the world not only in economy but in other fields too.

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