Week 4: (article) The Importance of International Trade to the Canadian Economy: An Overview by the Fraser Institute Flashcards
In 2015, had Canada’s GDP for exports gone up since 2008?
No, Canada’s export GDP was 36% before the 2008 crash, and 31.5% now. Canada’s export GDP is up from 1988, when GDP for exports was 25%.
Where is trade mainly oriented towards?
The U.S
What are the benefits of exports and imports to an economy?
Boosts productivity
What country exited the EU in 2020?
Britain
Is having a trade surplus always good?
Not necessarily
What countries are at the bottom of global economic development rankings?
Countries that chose economic independence like Latin America, China before 1978, India before 1991, Cuba, or North Korea.
Does Japan encourage imports?
No, Japan discourages imports and encourages exports
No, Japan discourages imports and encourages exports
70%, and they also had 14% higher efficiency
Who usually wins in trade disputes?
The more powerful country
What is a big downside of trade?
Trade leads to higher income inequality
What is mercantilism & its doctrine? What century(ies) was it dominant in?
Mercantilism is an economic system of trade, stating that wealth was static (finite) and that the government was the one to regulate and build wealth and power. Mercantilism argued that wealth and power were best served by increasing exports and reducing imports (Buy less, sell more)
What are the requirements of a nation for mercantilism to work?
Mercantilism always needs to…
Maintain a trade surplus
Have a large population
Perfectionism
Protect a nation’s ability to build and maintain trade
Restrict colonies from trading with each other
What book did ‘Adam Smith’ write and when? What did it argue?
Adam Smith was an economist who wrote “The wealth of nations” in 1776, argued that trade was both beneficial to the buyer and seller’s economies
How was colonialism used to exercise mercantilism/what is the method called?
Mother colonies such as Great Britain prohibited other colonies from trading with each other and mandated all goods to be bought and sold by the Mother country. This was called the ‘Triangle of Trade’.
What are 3 key ideas involving Mercantilism?
Mercantilism was the dominant economic system from the 16th century to the 18th century
Mercantilism was based on the idea that a nation’s wealth and power were best served by increasing exports and reducing imports
And due to the nationalistic nature of mercantilism nations frequently used military might to protect local markets and supply sources
How does colonialism relate to Mercantilism?
European colonial powers used the mercantilist system most ardently.
They embraced the idea of economic strength coming from reducing imports and getting more exports, and tightly grasping their gold supply and increasing it.
To create this, they created colonial systems that allowed them to extract resources
What are the Corn Laws?
A control system used by the English from the later 1700s until 1848 in order to protect British farmers. Later they gave some preferential rates to colonies such as Canada but maintained their protection. By the 1840s it was clear that food was too expensive and that people were going hungry. The Robert Peel government repealed Corn Laws to let more inexpensive food into Britain.
What are The Navigation Acts?
Created in 1660, England passed the Navigation Acts which prevented their colonies from selling directly to other European countries.
What did the first navigation act do?
Forced other European nations to buy goods in England - they could not go to American colonies seeking goods or raw materials. For the colonists, this stripped away any notion of free trade and restricted their markets severely.
What was a significant event reflecting the rise of protectionist sentiment in the world?
A) The Doha round of global trade talks
B) Canada’s Comprehensive Economic and Trade Agreement (CETA)
C) Britain’s vote to exit the European Union (EU)
D) The launch of the Trans-Pacific Partnership (TPP)
c
Which agreement did Hillary Clinton oppose during her presidential campaign?
A) The Free Trade Agreement (FTA)
B) The North American Free Trade Agreement (NAFTA)
C) The Comprehensive Economic and Trade Agreement (CETA)
D) The Trans-Pacific Partnership (TPP)
b
What percentage of Canada’s GDP did total exports of goods and services account for in 2015?
A) 25.2%
B) 31.5%
C) 36.1%
D) 44.2%
b
According to the text, what is one of the primary benefits of imports for an economy?
A) They increase tariffs on exports.
B) They lower prices and increase consumer choices.
C) They discourage competition among domestic firms.
D) They always lead to a trade surplus.
b
Which country accounts for the largest share of Canada’s exports?
A) China
B) Mexico
C) United Kingdom
D) United States
d
