Canada's Economy in 1996
To investigate the state of the Canadian economy, it is very useful to
track Canada's six major economic goals: economic growth, economic stability,
economic efficiency, economic equity, viable balance of payments, and low
unemployment. At a given time, Canada is achieving some of these goals while
falling behind on some of the others. When taken all into consideration, these
goals give an indication of how well Canada has been doing and the stage of the
business cycle the Canadian economy is in. In 1996-1997, Canada is in slight
recession and is only meeting the goals of economic stability, and viable
balance of payments.
Canada can be said to be in a period of slight recession because there is
a downswing in economic activity. To confirm a true recovery, "an economy must
show no growth for two consecutive quarters." However, Canada is not in a true
recession because there was a 3.0% growth in the third quarter, compared to
2.2% in the second quarter. Eventhough it is not true recession, the slow
growth is a sure sign of a slight one. Low inflation is also is also prevalent
and is symptomatic of a weak economy. A low inflation rate of 1.4% in November
1996 does not provide much of an indication for economic growth and expansion.
A shrinking positive balance of payments indicates these are tough economic
times. A fourth indication of a slight recession is the high unemployment rate.
An unemployment rate of 10.0% in November 1996 is definitely not a sign of
strong economic recovery.
Canada is always trying to work towards the goal of economic growth.
Economic growth is the percentage change of GDP over a period of time ...