Chapter 6: Determination of National Income

Article: Canada's recession less severe than other G7 countries http://www.montrealgazette.com/business/fp/Canada+recession+less+severe+than+other+countries/2909946/story.html


Summary: According to Statistics Canada, Canada experienced a recession less severe than any other G7 nation. Statistics Canada also said that this recession was no where as severe or as long as the downturns that Canada faced in the 1980s and 1990s. During the midst of the recession, Canada's GDP fell by just 3.3% while the United States experienced a 3.7% drop in GDP. The drop in GDP was much worse in Europe and Japan. Despite this recession being dubbed as "The Great Recession", the downturns in the 1990s saw a nearly 5% drop in GDP. Statistics Canada says that the key reason that we did better than most countries during the recession was because Canada's governments and companies had better balance sheets than their industrial counterparts.
Connections: Chapter 6 talks about the determination of national income. GDP is one of, if not the biggest factor in determining national income. Since GDP is a measure of the total goods and services produced by a country in a given year, it is a very good way of determining the amount of income a country generates. Seeing how a country performs during a recession is also a good way to see if a country can still earn income during a recession. The fact that Canada suffered the least of the G7 nations shows Canada's ability to make income while still being safe.

Reflections: I am quite amazed at how Canada suffered so little during "one of the worst recessions since the 1900s". This shows Canada's ability to maintain a well-structured economy. Before the recession, other nations thought of Canada to be too "safe" but now, Canada is marveled for having one of the best economies in the world. I believe that it is very good for Canada to have such a good economy. Investors who are seeking safer investments may go to Canada to search for one, which will put more money into our economy. Immigrants from other countries may be more willing to move to Canada since they have a stable economy and a reliable job market.