Economic Systems and Quality of Life

Vocabulary Terms

  • Economics: The study of how people use resources to satisfy needs and wants.
  • Economic System: The method used by a society to produce and distribute goods and services.
  • Economy: The system of production, distribution, and consumption of goods and services in a society.
  • Scarcity: The fundamental economic problem of having seemingly unlimited wants in a world of limited resources.
  • Privately Owned: Resources owned by individuals or corporations.
  • Publicly Owned: Resources owned by the government.
  • Crown Corporation: A government-owned corporation that provides essential services.
  • Public Good: A product that one individual can consume without reducing its availability to another individual, and from which no one is excluded.
  • Labour Union: An organization of workers formed to protect their rights and interests.
  • Collective Bargaining: The process in which workers negotiate with their employers for better wages and working conditions.
  • Unemployment Rate: The percentage of the labor force that is unemployed and actively seeking employment.
  • Shift Left: A movement towards more government intervention in the economy.
  • Shift Right: A movement towards less government intervention and more market-oriented policies.
  • Consumers: Individuals who purchase goods and services.
  • Consumerism: The cultural ideology that encourages the acquisition of goods and services in ever-increasing amounts.
  • Demand: The desire for a good or service backed by the ability to pay.
  • Producers: Individuals or businesses that create goods or services.
  • Supply: The total amount of a product available for purchase.
  • Competition: The rivalry among sellers to attract customers.
  • Strike: A work stoppage by employees to compel an employer to meet their demands.
  • Mixed Economy: An economic system combining private and public enterprise.
  • Market Economy: An economic system in which supply and demand regulate production and labor as opposed to government regulation.

The Impact of Economic Systems on Quality of Life

  • Different economic systems (e.g., mixed, market) influence the quality of life by affecting access to resources and services.
  • Canada and the US have mixed economies but vary in the extent of government involvement.

Characteristics of Economic Systems

Planned Economy

  • Government owns all resources and makes all decisions related to production and distribution.
  • Individual consumers have little influence on economic decisions.

Mixed Economy

  • Combines aspects of both private ownership and government control.
  • Resource ownership is shared and decisions are made by both individuals and the government.

Market Economy

  • Producers and consumers make decisions based on supply and demand.
  • Minimal government intervention; resources are privately owned.

Canadian Economic History

  • Canada values cooperation and collective good over individualism.
  • Economic shifts can result from political changes, affecting the roles of government and private sectors.

Key Shifts in Canadian Policy

Shift Left

  • Increase in government programs (e.g., public healthcare, CPP) under leaders like Lester B. Pearson.

Shift Right

  • Decreased government involvement under leaders like Brian Mulroney, focusing on privatization and free market policies.

US Economic Philosophy

  • Emphasizes individualism and minimal government interference, leading to significant wealth inequality.
  • Examples include FDR’s New Deal (left shift) and Reagan’s cuts to government spending and regulation (right shift).

Comparison of Economic Outcomes

  • US: Higher wealth inequality; education heavily privatized, resulting in disparities.
  • Canada: More equal distribution of wealth due to public services and subsidies.

Basics of Supply and Demand

  • Economic equilibrium occurs when supply meets demand at an optimal price.
  • Changes in demand affect price and market supply, responding to consumer desires and production capacity.

Role of Government in the Economy

  • Governments may intervene to protect public welfare and fair market practices.
  • Examples include enforcing product labeling, recycling mandates, and ensuring competitive pricing.

Labour Unions

  • Unions negotiate rights and benefits for workers, impacting wages and working conditions through collective bargaining.
  • Arguments for and against unions relate to mandatory memberships, impact on business costs, and worker rights.

Conclusion

  • Economic systems significantly shape quality of life through their structure and principles governing resource distribution. The balance between government involvement and market efficiency is key to achieving public good.