exam review module 2

Question 1

categories of governance activities in Canada that affect business

(6)

Answer 1

1. Crown corporations
2. Laws and regulations
3. Taxation and financial policies
4. Government expenditures
5. Purchasing policies
6. Services.

Question 2

canada has a mixed economy

Answer 2

(allocation of resources made by the market AND the government -> public & private businesses).

Question 3

Constitution Act

Answer 3

different levels of government have responsibilities over certain matters of the economy & businesses.

Question 4

Beginning of country

Answer 4

1867 -> protected young manufacturing industries an getting the railroad built to the west cost, bringing the country together

Question 5

Legal power & responsibility allowed for Canadian govt.

Answer 5

to build railroad as a result of the constitution act. US tried to interfere, were not strong enough.

Question 6

crown corporations

Answer 6

were important due to the fact that companies were not willing or able to assume certain responsibilities or fill needs in marketplace. i.e: CNR, Air Canada, Hydro-Québec.

in recent years

Canadian levels of govt. have been selling CC’s. (This is privatization) i.e: Petro-Canada, BC Rail LTD.

Question 7

Federal Govt. Responsibilities

Answer 7

Trade Regulation, incorporation of federal companies, national defence, immigration, fisheries.

Question 8

Provincial Government Responsibilities

Answer 8

Prov. govt. oversee natural resources within their boundaries, the administration of justice, municipal affairs, education.

Question 9

Municipal Government Responsibilities

Answer 9

Municipal govt.’s : cities, towns, villages, counties, districts are set up by provincial legislatures.
Municipal govt. provides services such as water supply, sewage and garbage disposal, roads, sidewalks, street lighting, building codes, parks, playgrounds, libraries, etc.
This plays a role in consumer protection (i.e: inspectors at restaurants.)

Question 10

Taxation + Financial Policies in Canada

Answer 10

Each level of govt. collects taxes from companies. THis allows govt’s to discharge legal obligations and fund government spending.

Question 11

Fiscal Policy

Answer 11

federal govt’s. effort to keep the economy stable by increasing or decreasing taxes or government spending.

Question 12

National Debt

Answer 12

federal debt. accumulation of past government surpluses or deficits.

Question 13

Monetary Policy

Answer 13

Controlled by Bank of Canada. Is the management of the money supply and interest rates. IF economy is booming, interest goes up, inflation stays down. Borrowing becomes more expensive, and therefore supply is controlled./

Question 14

Some expenditures target business subsidies

Answer 14

(i.e: R&D, clean tech -> enables companies to be competitive in GB).

Question 15

Helps consumers

Answer 15

(i.e: stable income through old age security, employment insurance). Govt. expenditures allow for education and job creation -> stable income

Question 16

Govt. provides businesses with direct and indirect aid packages as incentive to achieve goals.

Answer 16

i.e: tax reductions, tariffs and quotas on imports and subsidies such as grants, loans, loan guarantees.