The Ongoing Process of Globalization of the World Economy Has

question 37

Multiple Choice

The ongoing process of globalization of the world economy has an effect on the NAIRU in Canada.Choose the statement that best describes the likely effect.

• A)Since globalization has brought net economic benefits to Canada,it follows that the NAIRU must be decreasing.
• B)Canadian labour markets increasingly need to adjust to changing supply and demand conditions around the world.These ongoing adjustments tend to increase the NAIRU.
• C)Because Canada is experiencing greater trade with the rest of the world,the increasing demand for exports puts upward pressure on the demand for labour in Canada and thus tends to decrease the NAIRU.
• D)Canada's labour market is increasingly connected to labour markets in other parts of the world and the NAIRU in Canada tends to adjust to the same levels as those of our trading partners.
• E)Globalization has meant that Canadian labour markets are less exposed to economic fluctuations elsewhere in the world,which has decreased the NAIRU.

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Definitions:

Margin

The difference between the sales price of a product and its cost of production, often expressed as a percentage of the sales price.

Turnover

The rate at which inventory or assets are sold or replaced in a given period, or the rate employees leave and are replaced in a company.

Return On Investment

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of multiple investments, calculated as a ratio or percentage of the return on an investment relative to its cost.

Net Operating Income

The net amount a business earns after subtracting operating costs, excluding taxes and interest expenses.