The Formation Of A Canadian Infrastructure Development Bank Essay examples

853 Words Nov 15th, 2016 4 Pages
Name: Muhammad Mohsin
Student Number: 1002323112
Course: ECO202 (LEC0201)

“Given your knowledge of the theory of long-run growth, will the creation of a Canadian Infrastructure Development Bank increase Canada’s long-run economic growth rate? Will it affect Canada’s economic growth rate in the short-run? For both, explain why or why not.”
Long-run growth refers to the sustained increase in the quantity of commodities and services produced by the economy while economic growth refers to rise in the market value of the commodities and services produced by the economy over time. Economic growth is usually measured as a percentage change in the real gross domestic product (GDP) (Jones 2014). This paper will clarify how the formation of a Canadian Infrastructure Development Bank will prompt to long run and short run monetary development. It is true that the call by the Morneau 's economic growth council for the creation of a Canadian Infrastructure Development Bank will lead to increase in Canada’s long-run economic growth rate. The first reason why there will be increase in long run economic growth rate is increase in labor and capital productivity (Curry and Silcoff 2016). Improving the infrastructure will lead to efficiency in labor productivity because it will make it easy for workers to travel to work while businesses will have easy access to their goods. Good infrastructure will guarantee there is quick and reliable transportation of goods from industries to market…

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