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BUS-1201 Lecture Notes - Fiscal Policy, Monetary Policy, Microsoft Powerpoint

Course Code
Rosalie Harms

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Wednesday September 24 th
, 2008 Lecture:
Chapter 4:
Government's Involvement in Business:
Crown corporations
Laws and regulations
Taxation and financial policies
Financial aid
Government expenditures
Purchasing policies and Services
Crown Corporations diagram in power point
Laws and Regulations:
Laws are derived from four sources:
the Constitution Act;
precedents established by judges;
provincial and federal statutes; and
federal and provincial administrative agencies.
Federal government responsibilities include:
Trade regulations
Incorporation of federal companies
Taxation, both direct and indirect
The banking and monetary system
National defence
Criminal law
Provincial government responsibilities include:
Regulate food establishments
Zoning regulations
Business licensing
Provision of municipal services
Libraries, parks, playgrounds
Water supply, sewage & garbage disposal
Roads, street lighting, etc.
Taxation and Financial Policies:
Taxes(revenue, income and property) are the major bases of tax revenues.
Taxes are used a source of funding for government activities.
Sin taxes are used to discourage tax payers from using certain products. For example,
Tax credits are given to companies to encourage growth.

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All businesses pay various taxes (a cost of doing business), which are passed on to the
consumer in the form of higher prices.
Stabilizing the Economy through Fiscal & Monetary Policy:
Fiscal Policy:
The federal government's effort to keep the economy stable by increasing or decreasing taxes or
government spending.
Monetary Policy:
Management of the money supply and the interest rates are controlled by the Bank of Canada.
Deficit- created when the government spends more than it gathers in taxes over a specific period
of time.
National debt- the sum of government debt over time – today Canada's debt totals less than
$500 billion.
Federal Budget- a comprehensive report on what the government's financial policies will be for
the following year – how much revenue will be collected and whether there will be a deficit or
Federal Government Revenue Sources and Federal Government Expenditures pie charts on power
Financial Aid:
Direct assistance to business through grants, low-interest loans, loan guarantees, consulting
advice and information.
Equalization of transfer payments between provinces reduces fiscal disparities between the
wealthier and poorer provinces.
Marketing Boards control the supply or pricing of some agricultural products in order to
stabilize the industry.
Purchasing Policies:
The government is a very large purchaser and consumer of goods and services.
Governments attempt, where possible, to favour local businesses in their purchasing policies
including trade barriers between provinces.
Industry Canada offers a variety of programs to help businesses get started and to promote
businesses internationally.
- Canada's Innovation Strategy is a policy formed by the federal government to help Canada
become more competitive by 2010.
- The National Research Council supports research and technology in areas such as aerospace,
biotechnology, engineering and construction, industry support and communications technology
and manufacturing.
- Department of Foreign Affairs and International Trade offers support to those businesses
wishing to trade internationally.
Government sources Available to Assist Canadian Businesses chart in power point.
An Industrial Policy: Do We Need One?:
Many Asian countries have strong national industrial policies.

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Japan and other countries have experienced success when their government's partnered with
industry to pursue national goals.
Canada has lost many jobs to countries such as Mexico, China, India and Brazil.
The new trade agreements are trying to stop this kind of “unfair competition”.
Monday September 29 th
, 2008 Lecture:
Video Discussion on Red Bull (some discussion questions in power point, that were gone over in class)
Working with the Legal Environment of Business:
Criminal Law – defines crimes, establishes punishments and regulates the prosecution of people
accused of committing crimes.
Civil Law – involves legal proceedings that don't involve criminal acts.
Business Law – refers to rules, statutes, codes and regulations that provide a framework within
which business may be conducted and enforced by a court.
Statutory Law – written laws made by legislature, international treaties by laws.
Common Law – the body of law that comes from precedents or decisions handed down by a
judge, known as “unwritten law”.
Tort Law:
A tort is a wrongful act that causes injury to another person's body, property, or reputation.
Tort law focuses on the compensation of victims.
Negligence & product liability are 2 examples of tort law at work.
Laws concerning intellectual property:
Patent: A form of intellectual property that gives inventors exclusive rights to inventions for 20
Copyright: Protects a creators' rights to materials such as books, articles, photos, and cartoons
for 50 years after the death of the creator.
Trademark: Is a brand that has been given legal protection for the brand name and the pictorial
Industrial Design: Protects the owners exclusive right to use the visible features of a finished
product that identify it.
The Sale of Goods:
The Manitoba Sale of Goods Act applies to all contracts for the sale of goods.
The Sale of Goods Act establishes the rules and requirements associate with the deal,
establishing the respective rights and obligations of the parties of the contract.
Two type of warranties:
Express warranties: specific representation by the seller that buyers rely on regarding the goods
they purchase (new car warranty).
Implied warranties: are legally imposed on the seller, and implies that the product will conform
to the customary standards of the trade or industry in which it competes.
Elements of a Contract:
1. An offer is made.
2. Voluntary acceptance of the offer
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