Suppose Canadian-based Bombardier decides to close a Canadian factory and move production to a foreign facility. Bombardier then builds and operates a new factory in Mexico. What would the future production from such an investment do?

Question

Quizplus · Accepted Answer

The new factory in Mexico would increase production and exports from Mexico, leading to an increase in Mexico's GDP. On the other hand, the closure of the Canadian factory would lead to a decrease in production and exports from Canada, decreasing Canada's GDP. Therefore, the investment would result in an increase in Mexico's GDP and a decrease in Canada's GDP.

Suppose Canadian-Based Bombardier Decides to Close a Canadian Factory and Move