COMM 394 Chapter Notes - Chapter 8: Imperfect Competition, National Treatment, Market Failure
Document Summary
Exports have accounted for 30-35% of canadian gdp annually. Most trades are with us (60%), china is second. Western canada exports large quantities of resource-based to asia (including agricultural), while southern on is focused on manufactured products for the states. See class notes for canada vs caledonia example. A country is said to have a comparative advantage in the production of x if the opportunity cost of producing more x is lower in that country than it is in other countries (think opportunity cost) ); foreign competitors can undercut canadians and make a profit: exchange rate depreciates (falls): vice versa, exchange rates influenced by government policies in short-run, long-run movements reflect comparative advantage. 2 i. e. england sell cheaper, process of buying british pounds with. Portuguese escudos bid up the price of english pounds, causing appreciation of pound-escudo exchange rate until no longer profitable to buy from england, but vice versa.
