Question

SCENARIO BACKGROUND:
The controversy surrounding the European Union, as well as the recent increase in tension between the U.S. and Canada leaders, prompted many American analysts and politicians to weigh pros and cons and predict likely economic of closer integration in North America.

While most agree a US-Mexico union would have outweighing negative consequences for the US at this stage, primarily because of the great economic, political, societal and cultural differences between the countries, there is no consensus on the likely outcomes of a US-Canada union. Opinions range from “it would be a great economic success” to “it would ruin economies of both countries”.

The President and his administration do not see a US-Canada union as a likely scenario for the nearest future, but the government strategies have to consider and be prepared for any scenario, no matter how unlikely it may seem.

As a person knowledgeable in the area of the effects of government interventions in trade and regional integration, you are one of many experts invited by the Strategy Division of the Presidential Advisory Board to provide your visions on the likely consequences of a US-Canada Union. The scenario is planned for an economic union (common currency, taxes, laws and regulations, economic and foreign trade policies, unrestricted within-union trade and employment, central parliament, etc.) though a possibility of a political union is also considered.

The task is to predict the likely consequences of such a union, the two countries essentially becoming one, on public opinion, prices, internal and external trade, employment, investments, revenues and consumption. It is made very clear that your opinion must be rooted in existing economic theory covered in MGT 301. There are five questions (see template on the next page): If the US and Canada were to become one country, how would that likely affect the following domains of life?

Note: Please keep in mind that even though Canada and the U.S. are currently in a free-trade zone, there are many administrative, monetary, and political barriers to trade. For example, the traders must deal with the uncertainties and costs of currency exchange, the need to do separate certification in each territory, differences in taxes and other issues. So the trade between, for example, Montana and Alberta is still much harder than, for example, between North Carolina and Virginia.

The proposed scenario assumes a political union and removal of all trade barriers.

Note: The questions are about the changes in what today is the U.S. (will it affect the variety of products, prices, wages, unemployment and so far in the U.S. part of the new country).
However, the assumption is that the effect will be the same for both parts of the new country. If you believe that the effect will be different, you can explain it, though such differentiation is not required.

1. (10%, Production)

Based on your answers to the earlier questions,

What is the likely effect on the production volume?
That is, how will the volume of cumulative production of products change?

Group of answer choices

Increase

Remain the same

Decline

2. Please explain the mechanism that will improve/reduce production

3. (15%, Employment)

Based on your answers to the earlier questions,

What is the likely effect on employment?

Group of answer choices

Increase (more people working)

Remain the same

Decline (fewer people working)

4. Please explain the mechanism that will improve/reduce employment

Answer 1

Answer:-

1)

In my opinion,the mechanism of US Canada Union will bring about increment in production.

2)

This is a result of the expansion in exchange between the countries.Although by and by these nations are a piece of NAFTA (North American Free Trade Agreement),as examined above there are still obstructions as administrative,monetary (like outside trade bite the dust to various currencies,etc.,),tax regulations,political issues and so forth.,

In the event that an association happens it will receive the rewards like that of the part nations in the European Union - One Currency,unified monetary and finacial systems,job creation,employment,almost no movement restrictions,etc.,

So,in a nushell the production increments in light of the fact that the interest increments as the exchange limitations stop.

3)

As I would see it, Increase in Employment i.e more individuals working.

4)

As US and Canda structure an organization, it will profit firms in the two nations. Firms in the two nations can misuse their similar favorable position which will prompt productivity in production. Consequently, firms can cut cost and become progressively beneficial which will permit them to recruit more laborers and increment employment. Numerous organizations additionally have worldwide flexibly chain where they import a portion of their crude materials from the other nation.

These movies will profit by organized commerce and the expulsion of any taxes. The market for firms will likewise extend as it is simpler to send out theor produce so they have a greater interest to take into account that can build benefits and make it more for the organizations to grow and employ more.

Association - >More Trade- - > More Demand- - >More Production- - >More employment/Investment

Please please like the answer. . ,......