There is a saying that if the United States sneezes, Canada catches a cold. In common understanding it means that a recession in the United States causes a recession (perhaps a more severe recession) in Canada. Source: Jean Boivin, "The 'Great' Recession in Canada: Perception vs. Reality," Bank of Canada, March 28, 2011. Why would the Canadian economy follow the U.S. economy into a recession?
a. Canada's economy is not dependent on the recession in the United States.
b. A recession in the U.S. causes Canadian exports to increase, consumers and investors in Canada become optimistic and enhance purchases causing a deficit.
c. A recession in the U.S. causes imports from Canada to fall, consumers and investors in Canada become pessimistic and curtail purchase.
d. A recession in the U.S. causes imports in Canada to raise, consumers and investors in Canada become optimistic and enlarge purchases.