October sales numbers just became available and they are very good: retail sales were almost 1% higher than in September. As consumption in the US is about 70% of GDP, this means that the US economy is in good shape.
We can fit it into the IS-IC model we will be analyzing. Higher output in the US means that our exports are likely to significantly increase, as we will discuss today. This means that the IS curve will shift to the right, raising Canadian output (unless there are changes in the IC curve).
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