BSM 100 Lecture Notes - Lecture 3: Reserve Requirement, Monetary Policy, Deflation

• School: Ryerson University
• Department: Business Essentials
• Course: BSM 100
• Professor: Ranjita Singh

Document Summary

Pure competition: many suppliers (eg. commodities, no distinction between suppliers) the most ideal form of competition. Monopolistic competition: quite a large number of suppliers (eg. clothes, shoes, cars, differentiation between suppliers). Oligopoly: few suppliers (eg. canadian banks, beverage market). Impact on canada: trade exports surplus prices decrease reduced profits unemployment. Imports cheaper (to buy from us) Reduce profits; result in a drop of creativity and innovation. Tourists decrease and the local economies are affected. The government"s goal is to manage economic stability and growth. Fiscal policy: the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation"s economy. It is the sister strategy to monetary policy through which a central bank influences a nation"s money supply. Monetary policy: the process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.