Canada and the United States Had Approximately the Same Aggregate

question 32

Essay

Canada and the United States had approximately the same aggregate unemployment rates from the 1920s to 1981. In 1982, a two percentage point gap appears, which has roughly persisted until today, with the Canadian unemployment rate in the third quarter of 2002 being 7.6 percent while the American rate stood at 5.9 percent in the same period. Several authors have investigated this phenomenon. One study, published in 1990, contained the following statement: "It is a clichė that, as compared to analysis in the physical sciences, economic analysis is hampered by the lack of controlled experiments. In this regard, study of the Canadian economy can be much facilitated by comparison with the behavior of the US …" Discuss what the authors may have had in mind. List some potential threats to internal and external validity when comparing aggregate unemployment rate behavior between countries.

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Definitions:

Triglycerides

A type of fat found in your blood, used by the body for energy and considered an important measure of heart health.

Monosaccharides

Simple sugars, such as glucose and fructose, which are basic building blocks of carbohydrates and cannot be hydrolyzed to smaller molecules.

Activation Energy

The minimum amount of energy required to start a chemical reaction.

Catalysts

Substances that increase the rate of a chemical reaction without themselves undergoing any permanent chemical change.