Macroeconomic Analysis - Assignment

Running head: MACROECONOMIC ASSIGNMENT
Macroeconomic Assignment
Name of the Student
Name of the University
Author Note

MACROECONOMIC ASSIGNMENT1
Table of Contents
Answer 1....................................................................................................................................2
Introduction............................................................................................................................2
Economy of Canada...............................................................................................................2
Economic Trend of Canada....................................................................................................3
Economy of Canada between 2007-2010..............................................................................4
Economic events in the period of interest..............................................................................6
Reason: Global Financial Crisis (2007-2009)....................................................................6
Reason behind fast recovery of Canada.............................................................................7
Economic Implications and Interpretation.............................................................................8
Loanable Fund Theory.......................................................................................................8
Aggregate demand and Aggregate Supply Theory............................................................9
Conclusion............................................................................................................................14
Answer 2..................................................................................................................................15
Global Economic Outlook....................................................................................................15
Economic Outlook of Canada..............................................................................................18
GDP prediction for Canada and for the world.....................................................................19
References................................................................................................................................21

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MACROECONOMIC ASSIGNMENT3
Answer 1
Introduction
Attributing to the international phenomena like that of Globalization, industrial
revolutions, trade and commerce liberalization and also technological and infrastructural
innovations, the global economy has been becoming more integrated, inclusive and
connected. This in turn implies that the growth and dynamics of the economy of a country, in
the present period, depends on its endogenous activities and attributes as well as on the
exogenous factors which exist outside the concerned country but have considerable influence
on the economic trends of the same1.
Keeping this into consideration, the concerned assignment tries to study the economic
performance of one of the distinctively growing and economically prospering countries in the
global scenario, the economy of Canada, specifically emphasizing on the performance of the
same in the last fifteen years, thereby selecting a period in that time span, showing interesting
economic dynamics.
Economy of Canada
As discussed above, Canada is one of the primary developed mixed economy in the
contemporary global scenario, with substantial presence of a growing private sector as well as
a robust and efficient public sector in the economy. Ranking tenth in terms of global nominal
GDP and seventeenth in terms of purchasing power adjusted GDP, the country’s economy is
dominated by a growing service sector and the country is also globally popular for the
presence of huge natural resources and petroleum reserves and a stable manufacturing sector
which has grown and prospered over the years2.
1 Holland, John H. "The global economy as an adaptive process." The economy as an evolving complex system.
CRC Press, 2018. 117-124.
2 Schneider, Friedrich. "Size and development of the shadow economy of 31 European and 5 other OECD
countries from 2003 to 2012: some new facts." Accessed June 13 (2012): 2015.

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Economic Trend of Canada
To measure the economic performance of any country in a period, the primary
indicator which is used is the dynamics in the Gross Domestic Product in the country at that
period. Keeping this into consideration, the GDP of Canada over the past fifteen years can be
seen to be as follows:
Figure 1: GDP of Canada (2003-2018)3
As is evident from the above figure the GDP of the concerned country can be seen to
show an impressive growth trend over the period of 2003 to 2018, with the trend being
strictly positive in almost all parts of the concerned period4. However, one exception can be
seen in this otherwise impressively growing trend of Gross Domestic Product of the country,
specifically during the time period of 2008-2009, when the parameter actually showed a
declining trait.
3 Tradingeconomics.com, "Canada GDP | 1960-2018 | Data | Chart | Calendar | Forecast |
News", Tradingeconomics.com, 2018, online, Internet, 12 May 2018. , Available:
https://tradingeconomics.com/canada/gdp.
4 Cross, Philip, and Philippe Bergevin. "Turning points: business cycles in Canada since 1926." (2012).

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Figure 2: GDP growth rate of Canada (2003-2018)5
As is evident from the above figure, the growth rate of the GDP in Canada actually
augments the findings in the trend of GDP of the country. The rates (both positive and
negative) being subtle in other periods, however showed a massive decline during the period
of 2008-2009, the decline being the biggest in the concerned time period.
Thus, both from the GDP trend and from the dynamics of the growth rate of the same
in Canada, it can be seen that the period between 2007-2010 is a period of interesting
economic trend for the country and the following section of the assignment tries to emphasize
on the economic activities in the concerned period in Canada.
Economy of Canada between 2007-2010
To get a clear view of the GDP dynamics in the chosen period of interest, the following
figure is taken into account:
5 Tradingeconomics.com, "Canada GDP Growth Rate | 1961-2018 | Data | Chart | Calendar |
Forecast", Tradingeconomics.com, 2018, online, Internet, 12 May 2018. , Available:
https://tradingeconomics.com/canada/gdp-growth.