In Canada one of the purposes of the government, the people and the central bank is to keep the nation in economic prosperity. Even though a country will not prosper forever and will have downfalls, it is the way the situation is handled and dealt with accordingly, is what matters. When we talk about economic prosperity, involuntarily we should think of six main goal categories which include: economic growth, price stability, employment, efficiency, income distribution and viable balance of payment, in order to understand the current state of the economy. It will be through these categories and their success rate that this essay will be based on.
             Though Canada was hit with numerous negative crises last year such as; SARS, Mad Cow disease, and the blackout, it still did not hold the economy back from slowly rising. Hence, Canada's current position in the business cycle is the expansion phase.
             There were significant factors contributing behind the expansion. These factors include: a rise in consumer demand, an increase in employment, rise in income, decrease in interest rates, increase in business investments and an overall increase in the GDP.
             In the third quarter the GDP rose by 1.1 percent. The reason for this increase was that consumer demand rose and people started to buy. As consumer demand for goods increased employment eventually rose giving more job openings. By the end of November there were up to 166,000 new jobs and the unemployment rate fell to 7.5 percent from the previous 8.0 percent. Initially as more people started working, income per capita rose as well, this at the end caused more consumers spending. Consumer expenditure rose to 5.1 percent in the third quarter. Spending rose in all major categories but especially interest sensitive goods such as cars and houses. Due to the low interest rate set by the Bank of Canada the automotive and housing industry were able to get back up. Also low interest rates hel...