Increases consumer choice
Increases entrepreneurial freedom
Encourages Investment and growth
Keeps prices down and product quality high
Improves resources allocation and efficiency
Recognized in many international human rights documents
Right to adequate standard of living (food, housing, clothes)
Work
Form trade unions and join a trade union; right to social protection
Highest attainable standards of physical and mental health
Education
Mobility rights
Economic opportunity
Free elementary/secondary education
Private property
Fiscal policy: Use of government taxing and spending powers to manage the behavior of the economy
Government can increase/decrease spending on goods/services (hospitals, highways)
Change levels of taxation; leads to more employment
Voting influences these economic policies
Report discrimination or harassment
Ensure accessibility
Comply with human rights legislation
Enforce regulations that protect workers' right to a safe and harassment-free workplace
Pay taxes (eg. Paying income tax on money received from the sharing economy - Uber or Airbnb).
Total demand for all goods and services produced in an economy
One or more variables in the GDP formula must increase in value
GDP = C + I + G + (X - M)
Implemented when economy is in recession, AD is low, unemployment is high and GDP is low
Government can: Increase its spending, cut taxes or do a combination of both to stimulate eco
Tax Cut
Leads to an increase in disposable income of consumers ➡️increase in spending/consumption ➡️increase in employment and GDP
Works if consumers spend money and not save it
Increase in Government Spending
Will shift AD curve to the right
Increases GDP
Economy is suffering from inflation, AD is too high, employment is high and high growth in output
Government can: decrease AD, tax increase, a decrease in government spending
Increase in Taxes
Decrease in AD, people would have less money to spend (less disposable income)
Decrease in inflation rate
Trade-offs of lowering GDP and employment levels
Decrease in Government Spending
Reduce AD
Time Lags
Governments have difficulty changing spending and taxation policies
Conflict between the various levels of government
Regional Variations
Size of the current government debt
Burden for future generations
Director of Monetary Policy
Controlling growth of money supply by regulating credit, currency and interest rates
Banker to the banks
Banks deposit accounts with The Bank of Canada (the central bank)
Chartered banks use their accounts to settle debts with other chartered banks
Lends money to chartered banks for short period of time for investment purposes
Banker to the Federal Government
Federal government's revenues are deposited in 2 locations: Bank of Canada & Chartered bank accounts
Buy and sell federal government bonds, make interest payments to bondholders
Handle foreign exchange reserves - holds foreign currencies (US$) to use when intervening foreign exchange market to manage Canadian dollar
Issuer of currency
Issue of paper currency [decides design, printing and deals with counterfeiting]
Coinage is responsibility of the Royal Canadian Mint
Ran by the boards of directors appointed by the government
Controls money supply without political interference as its independent from government
Protects value of money through separating power to spend money (gov’t) from power to create money (B of C)
Goal is price stability (low inflation 1% - 3%), influence prices (inflation) to get this range
Uses Monetary Policy to force supply of money in economy; stimulate or slow down
The Overnight Target Rate – interest rate B of C charges chartered banks from borrowing
Open Market Operation – selling and buying back federal government and other bonds. Use cash reserves to influence both money supply and interest rates.
Reserve Requirements – influence money supply by modifying the amount of funds banks must hold against deposits in bank accounts.