Canada Inflation Rate research

p). This is expected to add pressure to the banking sector to increase the borrowing costs, and the country’s economy will be near capacity. This also affected the Canadian dollar as it increased by 0. 6 percent per USD. The factors that contributed to the rate include the increase in prices for gas, cars, and mortgage. The decrease of oil and gas prices affects Canada’s economy, but the increase in food and housing prices helps to bring a balance in the inflation rate. Inflation also influences the rate of imports and exports. Canada is a significant force in the import and export business, making inflation significant in its economy. During inflation, we need to distinguish between money income and real income.

In most cases, the price of goods increases while money income remains the same. For instance, in the 1990s, the unemployment rate in Canada performed poorly compared to that of the United States (Fortin 113). As inflation increases, the workers also demand an increase in their wages so that the real wages remain constant. However, this does not benefit the economy as the real GDP remains fairly constant. Additionally, as the rate of unemployment decreases, inflation has to increase to maintain investor and government income. Works cited Argitis, Theophilos. com/news/articles/2018-03-23/canada-inflation-accelerates-to-fastest-pace-in-three-years Cashin, Paul, et al. "The differential effects of oil demand and supply shocks on the global economy. " Energy Economics 44 (2014): 113-134. Fortin, Pierre. "Interest rates, unemployment and inflation: the Canadian experience in the 1990s.