1.In your own words, describe the circular flow model of how economies work
2.Explain with examples why Canada is a mixed economy
3.Explain how economic recession in the United States can affect the Canadian Economy
Communication [6 marks]
4.Create an economic system continuum by drawing a line and putting the label “centrally planned economy”
on the left and “market economy” on the right.
Placed the following countries on the continuum: Canada, United States, China, Cuba, United Kingdom, and
Venezuela.
Explain the reasons for the positioning of countries
Thinking / Inquiry [6 Marks]
5.In your opinion, where is Canada currently on the business cycle?
Provide 3 reasons for your answer
Application [5 Marks]
6.Assume that two countries are trading: Canada and Australia. They can each produce only two produces
using half of their resources for each.
Use the following table to answer the following questions
Country Coats Sweaters
Canada 30 6
Australia 10 20
a. How many coats and sweaters are produced?
b. In which good does Canada and Australia has comparative advantage
c. In which good does Canada and Australia has absolute advantage
d. If both countries decide to specialize in the good, they have absolute advantage in, and trade.
Create a new trade table showing how production units will change.
e. If both countries decide to specialize in the good, they have comparative advantage in, and trade.
Create a new trade table showing how production units will change.
Sample Solution
