Canadian Economy What is the basic type of economic system found in Canada? MARKET How do most countries strike a balance between having a pure market and pure command economy? • Most countries in the world have elements of pure command and pure market economies. • Because they are a mixture of both, we say that most country’s economies are mixed. How does specialization enhance Canada’s ability to trade with other countries? – No country does all things well. So each country uses the industry that it does do well to trade to other countries(export). Then they receive the things they don’t do well from other countries(import). – For example: Canadians love oranges but can’t grow them because of the climate. They do produce grains so they trade the grains(export) and receive the citrus fruit(import) from other countries. How does NAFTA impact Canada’s economy and trade? • NAFTA is a free trade agreement that removes trade barriers (tariffs, quotas, and embargoes). • NAFTA has allowed Canada to trade with the United States and Mexico without penalty and has improved the economy of Canada. How do trade barriers (tariffs, quotas, and embargoes) hinder voluntary trade from occurring between countries? • Tariff- tax on imported goods. • Quota- limit on imported goods. • Embargo- restriction or total ban on trade. Examples: Tariffs drive the price up on imported goods so the consumer is less likely to buy the imported product. Quotas limit the amount a country can import. If they have a great crop, they may not have a market because of quotas. Embargoes will not allow trade at all in some cases. How do the factors of location, climate, access to water, and natural resources affect where Canadians live and work? • People live and work where resources are located, climate is moderate, and especially where there is access to water so they can trade.
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