The ongoing process of globalization of the world economy has an effect on the NAIRU in Canada.Choose the statement that best describes the likely effect.
A) Since globalization has brought net economic benefits to Canada,it follows that the NAIRU must be decreasing.
B) Canadian labour markets increasingly need to adjust to changing supply and demand conditions around the world.These ongoing adjustments tend to increase the NAIRU.
C) Because Canada is experiencing greater trade with the rest of the world,the increasing demand for exports puts upward pressure on the demand for labour in Canada and thus tends to decrease the NAIRU.
D) Canada's labour market is increasingly connected to labour markets in other parts of the world and the NAIRU in Canada tends to adjust to the same levels as those of our trading partners.
E) Globalization has meant that Canadian labour markets are less exposed to economic fluctuations elsewhere in the world,which has decreased the NAIRU.
Correct Answer:
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