The accompanying figure illustrates the current account balance for Canada from 1987 to 2016. A positive balance represents a trade surplus, while a negative one represents a trade deficit. While Canada often ran a trade surplus over this time period, it has also been running a growing trade deficit with China. Which of the following statements are valid possible explanations of this fact? Explain.

a. Many products, such as televisions, that were formerly manufactured in Canada are now manufactured in China.

b. The wages of the average Chinese worker are far lower than the wages of the average Canadian worker.

c. Investment spending in Canada is high relative to its level of savings.

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Canada's account balance (billions) $40 30 20 10 -10 -20 -30 -40 -50 -60 Year 1987 1991 1995 1999 2003 2007 2010