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2 When the USA experienced high inflation in the 1970s, Canada also experienced high inflation. Indeed,...

2 When the USA experienced high inflation in the 1970s, Canada also experienced high inflation. Indeed, Canada was said to have “imported inflation” from the USA. If Canada’s exports to the USA were high, Canada’s foreign exchange reserves would have increased. Since exports create jobs, how could Canada have imported inflation from the USA?

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As it is mention in the question both USA and Canada both are facing inflation in the same time period.But Canada was said to have "imported inflation" from the USA, this is because as USA is the highest importer of Canadian export this leads to increase the national income of Canada by increasing foreign capital reserve as well as increasing employment. when employment increases wage/ salary comes to the people's hand and demand for goods increases in Canada which leads to inflation. As USA is the highest importer that is why Canada was said, imported inflation.

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