Globalization has affected resource-based communities in Canada. Which statement best describes this effect?

• A. It reduces global markets and stabilizes prices.
• B. It leads to boom-bust cycles due to commodity price fluctuations, with some communities diversifying and others remaining resource-focused.
• C. It eliminates dependence on the US market.
• D. It guarantees consistent employment in all communities.

Answer: (B)

Globalization links local resource-based economies to global demand, so the prices of commodities like oil, minerals, and timber swing with world markets. Those price swings drive boom-and-bust cycles in many communities: when prices rise, investment and jobs jump; when they fall, activity slows and unemployment can increase. Some communities respond by diversifying their economies or adding value locally to reduce reliance on a single commodity, while others stay focused on resource extraction and remain vulnerable to market fluctuations. That combination makes the statement describing price volatility and varied community responses the best fit.

Prices don’t become more stable or markets shrink because of globalization, and the US market remains a major player in many Canadian resource trades. Employment isn’t guaranteed in every community, since cycles can either boost or cut jobs depending on commodity prices.