Impact of FDI

 

Question 1: Impact of FDI (15 marks)
Following the slow down in productivity in Canadian manufacturing during the 1990s and the
signing of NAFTA in 1994 there were large capital outflows (FDI) that moved from Canada into
the United States and Mexico. All countries produce two goods: a manufacturing good (M) and
an agricultural good (A). Manufacturing is capital intensive and uses labour and capital in both
the short and long run. The agricultural good is labour intensive and requires labour and land in
the short run but switches to capital and labour in the long-run.
(a) Using the Specific-Factors Model graph the short-run impact in Canada from the capital
outflows. Describe and explain the following:
(i) impact on the wages of workers.
(ii) impact on capital owners and land owners.
(iii) changes in the allocation of resources between industries and production.
(b) Using the Heckscher-Ohlin Model graph the long-run impact in Canada from the capital
outflows. Describe and explain the following:
(i) impact on the wages of workers.
(ii) impact on capital owners.
(iii) changes in the allocation of resources between industries and production.
(c) Using the imperfect competition model discuss which Canadian firms were most affected by
the capital outflows that occurred during this time?

Sample Solution

barrier to diversion at the point of intake. While it is certainly important to respect a victim’s right to be heard regarding a potential diversion decision, stakeholders expressed concern that some intake officers are not as invested in creating diversion opportunities for young people and are not skilled at conveying the documented benefits of diversion for the youth, the victim, and the broader community from a public safety perspective. DJS has acknowledged these barriers and is currently working to remedy them in several ways. For example, DJS is in the process of developing a new clear, objective diversion policy and a quality assurance process for diversion decisions. DJS is also exploring better training for intake staff and the addition of a new family and peer support specialist for Baltimore City. Among other duties, this staff person would be responsible for outreach to victims in support of diversion efforts.

Third, many stakeholders suggested that intake officers may not always consider whether a young person is already receiving existing services or supports that could be adjusted or enhanced in lieu of informal adjustment or formal processing. Stakeholders noted that many youth are often involved with services through multiple public systems and providers and that layering more on top of those services may actually impair the ability of those supports to achieve their intended effect. Many individuals suggested that more rigorous exploration of a young person’s current services and supports would help support increased use of diversion at intake.

Trends in DJS intake data support the hypothesis that there may be significant variability in diversion practices at DJS intake, both within Baltimore City and between Baltimore City and the rest of the state. As mentioned above, DJS Intake received 1,783 referrals in Baltimore City in FY 2018. As shown in Figure 1, 16% of these cases were resolved at intake, 6% were “informaled” (placed on pre-court or informal supervision), while 78% of cases were “formaled” (authorized for a formal petition and referred to SAO for further processing with the juvenile court). In contrast, for the rest of M

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