Question

Describe an export subsidy, and explain the gains and losses that might arise from such a practice s. a. (5 marks) b. Why are developing countries in Africa especially affected by export subsidies in industrial countries? (5 marks) 9. In 2012, the Canadian dollar appreciated against the US dollar. Explain the effects of this appreciation on each of the following. (10 marks) a. Canadian importers of goods from the United States b. Canadian firms that sold commodities to US buyers e. American tourists who came to Canada d. US investors who had purchased Canadian securities (2.5 marks) (2.5 marks) (2.5 marks) prior to this currency appreciation (2.5 marks) 10. The Global Insight (GI) forecasting firm predicted that the Canadian economy would bounce back by a stronger-than-expected 1.0 percent on an annualized basis in the third quarter of 2012 and with a further 0.1 percent in the fourth quarter of 2012. The firm also expected moderate growth overall in 2013 (10 marks) a. What evidence did GI present to support the view that Canada had entered a recovery? (2 marks) inflation rate may have increased over the course of (4 marks) b. Use a short-run Phillips curve to explain why the 2012 e. Under what circumstances might the inflation rate not have increased during 2012? 4 marks)