Basic and Non-Basic Industries Overview
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Questions and Answers

Which of the following is an example of a basic industry?

  • Transportation service
  • Retail store
  • Farming (correct)
  • A hairdresser

The tertiary sector primarily focuses on the manufacturing of goods.

False (B)

Name one primary industry in Canada.

Agriculture

In the three-sector theory, economic activities shift from the primary to the secondary and finally to the _______ sector.

<p>tertiary</p> Signup and view all the answers

Match the following economic terms with their definitions:

<p>Imports = Goods brought into a country Exports = Goods sent to another country Trade Surplus = When exports exceed imports Trade Deficit = When imports exceed exports</p> Signup and view all the answers

Which industries use natural resources to produce finished products?

<p>Secondary Industries (A)</p> Signup and view all the answers

In Canada, the service industry tends to earn more money than the goods-producing industries.

<p>True (A)</p> Signup and view all the answers

What is a trade surplus?

<p>When the value of exports is greater than the value of imports.</p> Signup and view all the answers

What was the main contributor to Canada's trade deficit in 2009?

<p>Decrease in oil prices (B)</p> Signup and view all the answers

The USMCA replaced the North American Free Trade Agreement (NAFTA).

<p>True (A)</p> Signup and view all the answers

What percentage did metals and alloys exports decrease due to lower demand?

<p>29.9%</p> Signup and view all the answers

Canada's biggest contributor to trade surplus or deficit is the __________ sector.

<p>energy</p> Signup and view all the answers

Match the following aspects of USMCA with their descriptions:

<p>Facilitates trade = Supports jobs in North America Environmental rules = Ensures protection of nature Stricter rules on production = Means more parts are made in North America Enhanced online trading = Makes it safer to buy and sell online</p> Signup and view all the answers

What might happen to Mexico's wages as a result of competition with the US under USMCA?

<p>Decrease to compete (D)</p> Signup and view all the answers

Canada's dependence on the US economy is a reason to worry about trade deficits.

<p>True (A)</p> Signup and view all the answers

The trade agreement signed in 1988 that initiated free trade with the US was called __________.

<p>NAFTA</p> Signup and view all the answers

What is USMCA primarily designed to ensure?

<p>Fair trade among Canada, the US, and Mexico (B)</p> Signup and view all the answers

The Cod Moratorium imposed in 1992 allowed fishing for cod to continue.

<p>False (B)</p> Signup and view all the answers

What is one of the primary reasons for the collapse of the Cod fisheries in Canada?

<p>Overfishing or destructive fishing techniques</p> Signup and view all the answers

What is a major cause of overfishing?

<p>Fishing fleets significantly larger than necessary (A)</p> Signup and view all the answers

______ are benefits applied to products made in the same country, which can include tax reductions.

<p>Subsidies</p> Signup and view all the answers

Match the following types of fishing with their characteristics:

<p>Longlining = Can accidentally catch vulnerable species and attracts non-target marine animals Trawling = Destroys the natural seafloor habitat and catches unintended species</p> Signup and view all the answers

Illegal fishing contributes to the tragedy of the commons.

<p>True (A)</p> Signup and view all the answers

What was the GDP calculated in the example given?

<p>$11,500</p> Signup and view all the answers

Which type of fish is categorized as ground fish?

<p>Cod (C)</p> Signup and view all the answers

Free trade policies impose high tariffs on imported goods.

<p>False (B)</p> Signup and view all the answers

The basic industry is crucial for the local economy because it is the base of the __________ economy.

<p>domestic</p> Signup and view all the answers

What is overfishing?

<p>Catching more fish than can be naturally replaced in a given year</p> Signup and view all the answers

What is the primary sector of the economy concerned with?

<p>Raw materials (C)</p> Signup and view all the answers

Match the following sectors of the economy with their descriptions:

<p>Primary = Raw materials extraction Secondary = Manufactured products Tertiary = Services Quaternary = Knowledge-based services</p> Signup and view all the answers

Tertiary industries are less profitable than primary industries.

<p>False (B)</p> Signup and view all the answers

What significant change happened to China and India between 1990-2000?

<p>The Industrial Revolution.</p> Signup and view all the answers

NAFTA was first established in 1993 and later renegotiated in 2018 as USMCA.

<p>True (A)</p> Signup and view all the answers

What caused Canada to experience a trade deficit in 2009?

<p>The price of oil decreased significantly.</p> Signup and view all the answers

Canada's main trade partner is the __________.

<p>United States</p> Signup and view all the answers

Match the following terms with their definitions:

<p>Trade Surplus = Value of exports greater than imports Trade Deficit = Value of imports greater than exports Balance of Trade = Difference between exports and imports</p> Signup and view all the answers

Which natural resource significantly impacted Canada's economy in 2009?

<p>Oil (C)</p> Signup and view all the answers

Exports are unimportant for the Canadian economy.

<p>False (B)</p> Signup and view all the answers

What role do nations trade natural resources?

<p>To gain access to goods and services they cannot produce.</p> Signup and view all the answers

Flashcards

Primary Industry

Harvesting natural resources.

Secondary Industry

Manufacturing or processing raw materials into products.

Tertiary Industry

Providing services, not creating goods.

Trade Surplus

Exports exceed imports.

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Trade Deficit

Imports exceed exports.

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Import

Goods brought into a country.

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Export

Goods sent to another country.

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Basic Industries

Industries providing raw materials or products for others.

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Canada's Trade Deficit

Canada experienced its first trade deficit since 1975.

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Impact of Oil Prices on Trade

Significant fluctuations in oil prices (e.g., a 70% drop) heavily affect export values, with substantial effects on Canada's trade balance.

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USMCA Key Goals

The USMCA, replacing NAFTA, aims to smooth trade and investment among the US, Mexico, and Canada, and enhance protections for wages and working conditions.

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Consequences of Trade Dependence

Significant economic dependence on a single trading partner (like the US) can pose challenges, as an economic downturn in that nation can impact Canada's trade balance.

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USMCA Implications for Jobs

USMCA rules on product origins might help Canadian jobs in specific industries because of stricter rules to support North American manufacturing.

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Alternatives to US Dependence

Diversifying trade relationships with other countries can help mitigate reliance solely on the US market during economic downturns.

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NAFTA

North American Free Trade Agreement, a previous trade agreement between the US, Mexico, and Canada.

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Trade and Consumer Benefits of Free Trade

Free trade, in principle, lowers prices for consumers by increasing competition

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USMCA

The United States-Mexico-Canada Agreement, a trade agreement that replaced NAFTA in 2020.

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Why do nations trade?

Nations trade to access goods and services they cannot produce themselves and to maintain a favorable balance of trade.

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Balance of trade

The difference between the value of a country's exports and imports.

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2009 Trade Deficit in Canada

Canada experienced a trade deficit in 2009 due to the decline in oil prices, affecting the country's economy significantly.

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Importance of Exports to Canada

Exports are crucial for the Canadian economy, providing revenue to import goods and services and supporting the country's financial stability.

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Tariff

A tax imposed on goods imported into a country. Tariffs increase the cost of imported products, making domestic goods more competitive.

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Subsidy

Financial assistance provided by a government to domestic producers, such as tax breaks or direct payments. Subsidies aim to support domestic industries and make their products more affordable.

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Free Trade

A policy where governments minimize barriers to international trade, allowing goods and services to flow freely across borders without significant restrictions like tariffs or import quotas.

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Protectionism

A policy that aims to protect domestic industries from foreign competition by employing trade barriers such as tariffs, import quotas, and subsidies. This limits imports and protects local businesses from international competition.

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Cod Moratorium

A temporary ban on fishing cod, imposed in 1992 in the Atlantic by the Canadian Government to allow the cod population to recover. It continues to this day.

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Overfishing

Catching more fish than can be naturally replenished in a given year, leading to depletion of fish stocks and potential collapse of the fishery.

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Longlining

A fishing technique that uses a long line with baited hooks, which can catch unintended species and disrupt marine ecosystems due to bycatch.

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Overfishing Cause

Fishing fleets are too large for the oceans' capacity, leading to unsustainable fishing practices.

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Illegal Fishing

Fishing methods that harm marine life and ecosystems, such as bottom trawling, are banned by the UN but still occur.

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Non-Basic Industry

Industries that rely on basic industries and cater to local consumers, contributing to the flow of money.

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GDP (Gross Domestic Product)

The total value of goods and services produced within a country's borders in a given period.

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GDP per Capita

The total GDP divided by the population, reflecting the average income per person.

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Industrial Revolution

A period of technological advancements that led to widespread use of machines, increasing productivity and GDP.

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Sectors of the Economy

Primary (raw materials), Secondary (manufacturing), and Tertiary (services) industries contribute to a country's economy.

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Study Notes

Basic Industries

  • Basic industries supply raw materials or products
  • Examples include agriculture and oil

Non-Basic Industries

  • The money in these industries circulates within the community
  • Examples include jobs at a hardware store or hairdresser

Primary Industries

  • These industries harvest natural resources
  • Examples include farming, coal mining, and forestry

Secondary Industries

  • These industries manufacture or process raw materials
  • An example is turning farm-produced leather into a jacket

Tertiary Industries

  • These industries sell services
  • An example is a trucking company transporting goods

Economic Cycle

  • Raw materials are extracted from the primary sector
  • These materials are processed in the secondary sector
  • Products from the secondary sector (and primary sector) are sold by the tertiary sector
  • The economy goes in a continuous loop

Primary Industries in Canada

  • Agriculture
  • Fisheries
  • Forestry
  • Mining
  • Oil and Gas

Secondary Industries in Canada

  • Manufacturing (e.g., clothing)
  • Construction (e.g., buildings)
  • Utilities (e.g., electricity)

Economic Cycle Diagram

  • Shows how raw materials from the primary sector flow into the secondary sector to be made into something
  • Then the tertiary sector sells them to consumers

Three-Sector Theory

  • The economy progresses from primary to secondary and finally to tertiary industries to become more advanced
  • The primary sector is more basic, and the tertiary sector generates more money than the other two.

Canada's State of Trade (2009)

  • Canada experienced its first trade deficit since 1975
  • The energy sector, especially oil, is a major source of trade surplus or deficit for
  • The price of oil fell dramatically
  • This significantly impacted Canada's exports

USMCA

  • A trade agreement between the US, Mexico, and Canada
  • Replaces NAFTA
  • It aims to streamline trade and investment
  • Includes stricter rules on where products are made
  • Provides stronger protections for workers' rights and wages
  • Includes new rules for online trade
  • Includes more environmentally friendly regulations

Review Questions

  • Explain the benefits of Trade: Nations trade for a variety of reasons, including access to goods and services they don't produce themselves, lower prices and to maintain balance of trade.
  • Define Balance of Trade: The difference between the total value of a country's exports and imports. A trade surplus occurs when exports exceed imports, and a trade deficit occurs when imports exceed exports.
  • Describe the History of Canada's Balance of Trade and Occurrences for the 2009 Trade Deficit: Canada traditionally had a trade surplus due to its natural resources (like oil) but experienced a 2009 trade deficit due to a drop in the oil price.
  • Explain the Importance of Exports to the Canadian Economy: Exports are vital because they provide revenue to sustain imports, create jobs, allow the economy to function, and provide a competitive international market for Canadian goods
  • Identify Canada's Main Trade Partners: One of the biggest trading partners (and a source of imports for Canada) are the Unites States

Atlantic Fisheries

  • Fishing is a renewable resource
  • Canada has commercial fisheries along the Atlantic and Pacific coasts, Great Lakes.
  • Common fish types: Ground, Pelagic, and Shellfish (cod, haddock, tuna, mackerel, clams, oysters, etc.)
  • Regulations, improved techniques and management help keep fisheries healthy

Cod Moratorium

  • 1992, a temporary ban on fishing for cod in the Atlantic
  • Put 30,000 people out of work
  • Cost the Canadian economy significantly
  • The Cod population has not fully recovered

Overfishing

  • Catching more fish than can be replaced naturally
  • Can cause depletion of fish populations
  • Leads to damage of marine habitats and ecosystems

Illegal Fishing

  • Illegal fishing negatively impacts the economy and marine life
  • Often results in overfishing or endangered species.

Business Industries

  • Basic industries need to support non basic industries for an economy to function properly
  • Non basic industries use products and services from the basic industries and create further revenue
  • A local economy is dependent on these two types of industries working together

GDP

  • A country's total output of goods and services
  • GDP goes up as imports increase

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Description

This quiz explores the different types of industries including basic, non-basic, primary, secondary, and tertiary sectors. Understand the role each type plays in the economy and their examples, particularly focusing on Canada. Test your knowledge on how these industries interact within the economic cycle.

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