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level: Chapter 4

Questions and Answers List

level questions: Chapter 4

QuestionAnswer
List the 7 government activities that affect business- Crown Corporations - Laws and Regulations - The Bank of Canada - Taxation and Financial Policies - Government Expenditures - Purchasing Policies - Services
Define Crown Corporationcompanies that are owned by the federal or provincial government.
Crown Corporations are set up to1. Provide services that were not being provided by business. E.g. Air Canada in 1930s 2. Bail out major industries in trouble. E.g. Canadian National Railroad (CNR) in 1919 3. Provide special services not otherwise available; e.g., Bank of Canada
Define Privatizationthe process of governments selling Crown corporations
Define Deregulationgovernment withdrawal of certain laws and regulations that seem to hinder competition. Therefore the marketplace becomes more competitive
Define Marketing boards- organizations that control the supply or pricing of certain agricultural products. E.g. milk production - Marketing boards promote stability in volatile areas of the economy, e.g., farming
What is the Bank of Canada(BoC) and what does it do ?The Bank of Canada (BoC), a federal Crown corporation, is Canada’s central bank. As a financial institution, it provides banking services on behalf of the federal government; however, it does not offer banking services to the public
Define Monetary Policyis the management of the money supply and interest rates
Define Money SupplyThe money supply is the amount of money the BoC makes available for people to buy goods and services.
Interest RatesReduce interest rates to stimulate the economy and increase interest rates slow down the economy to control inflation
The role of taxestaxes (revenue, income, and property) are used by government to pay for services, pay down debt, and fund government operations and programs
Role of sin taxessin taxes are used to discourage tax payers from using certain products; e.g., cigarettes.
role of tax creditsTax credits are given to companies to encourage growth
Define Fiscal Policythe federal government’s effort to keep the economy stable by increasing or decreasing taxes or government spending
Define Deficitoccurs when the government spends over and above the amount it gathers in taxes over a specific period of time (namely a fiscal year).
Define National Debtthe accumulation of government surpluses and deficits over time.
Define Surplusan excess of revenues over expenditures.
Define Federal Budget- a comprehensive report that reveals government financial policies and priorities for the coming year.
What does a Federal Budget do ?- shows how much revenue the government expects to collect - any changes in income and other taxes and whether a deficit or surplus is expected
Monetary Policy- management of the money supply and the interest rates - Controlled by BoC and it raises and lower interest rates in attempt to control the business cycles
Public-Private Partnership (P3s)Merging of public and private philosophies
The Competition BureauAccording to competition law, a store must offer regular pricing for a substantial period of time, usually 50% when it comes to low price.
Federal government responsibilities include- Trade regulations / - Immigration - Incorporation of federal companies / -Criminal law - Taxation (direct & indirect) / -Fisheries - Banking and $ system - DnD - Hospital insurance - Public debt and property - Unemployment
Provincial government responsibilities include•natural resources within their boundaries •direct taxation for provincial purposes •incorporation of provincial companies •licensing for revenue purposes •the administration of justice •health and social services •municipal affairs•property law•labour law •education •regulation of provincial trade and commerce
Municipal government responsibilities include- consumer protection - zoning requirements - business regulations, licensing - taxation - essential and other services
Industrial PolicyA comprehensive, coordinated government plan to guide and revitalize the economy