This report analyses Canada’s economy applying macroeconomic concepts for past 20 years, for the possible investment in this country. Canada is located in the northern hemisphere above the United States, the scope of the country is 9,984670 square kilometers, which is 157,995 larger than United States (9,826,675 square kilometers). The official languages in Canada are; English and French. French is mainly used in Quebec. The estimate of the country’s population is 35,344,962. This country has immense source of natural resources and are economically and technologically advanced (Central Intelligence Agency, 2013). Agriculture, gas extraction, mining, manufacturing, oil and services make up the country’s GDP (Gross Domestic Product) (Canada in the Making, 2002). Canada is a constitutional monarchy and federal parliamentary democracy which is collaborating with 3 territories and 10 provinces (Central Intelligence Agency, 2013). The country legal systems are; civil law from the French, which is used in Quebec and British common law for the rest (Parks Canada, 2009). Civil law is from the civil code by Roman law that French adopted that reviewed issues with private law. The British common law is enforced by the English in those places that they have colonized. This law is acknowledged as a guide, but can be revoked when government passes the new laws (Canada in the Making, 2002). The Canadian economy is significantly tied with the United States through the North America Free Trade Agreement (1994) which includes Mexico and Canada-United States Free Trade Agreement (1988). The purpose of the agreements was to cut tariffs or remove it completely between the countries (Schott & Murry, 1988). Other than the trade agreements, government added Invest in Canada department to persuade foreign investors as well as to give assistance to companies who are planning to invest in the country (Government of Canada, 2013). Other than two agreements mentioned above, it is also involved with other trade agreements and economic organizations. For free trade: World Trade Organization (WTO), Asia Pacific Economic Cooperation (APEC). Economic organization: Organizations for Economic Cooperation and Development (OECD), North Atlantic Treaty Organization (NATO), World Bank, International Monetary Fund (IMF), United Nations (UN) and Group of Eight (G8) (Foreign Affairs and International Trade Canada, 2013).
To define economy, it involves production, trade and consumption of limited goods and services by individuals, businesses, organizations, or governments in a given geographical site (Krugman & Wells, 2013). Growth of the economy can be measured through Gross Domestic Product (GDP). GDP is the total value of all produced goods and services within a country in a given year. It includes consumptions, government spending, net exports and investments. Real GDP is adjusted GDP using a selected base year and price (Krugman & Wells, 2013).