ADMS CH. 8.doc

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ADMS Notes CH.8
qqqqqaThe Canadian Business Enterprise System:
Fundamental Features:
All companies have some sort of economic or business enterprise system:
oWhat goods and services are produced and distributed to society
oHow the goods and services are produced and distributed
Capitalism: economic system based on following principles:
oRights of individual
Individuals have own rights to pursue own self-interests(ie: profits)
Gov’t regulations enforce rules that effect how business owners conduct
their affairs(gov’t guidlines of candidate selction)
oRights of private property
Taxation-redistributing wealth in society
Whether a product should be nationalized Gov’t or not
Ie: health care
oCompetition
Goal of capitalism
oThe Role of the gov’t?
Laissez faire
Or gov’t restrictions
Gov’t as guardian of society:
Tax Collector Role:
oRevenue taxes
Individuals taxes
Corporations
oSales tax
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ADMS Notes CH.8
Gst
oProperty Tax
oRestrictive Tax
Goods(alcohol and tobacco)
Crown Corporation
oCrown Organization: accountable through a minister to parliament
Implements public policy and safeguards national interests:
Air Canada and Petro for transport national interest
To protect vital industries to economy:
CNR: safeguarded gov’ts largest investments in railways
Special services that couldn’t be done by private businesses:
Air Canada established after no company could take the risk
and plunge
Bank of Canada as well controlled by Gov’t to regulate
monetary operations in CAN
To nationalize industries considered to be ‘natural monopolies’
Electricity: grids too large to be a privatized company; so
gov’t intervenes
LCBO: largest single retailer
oCons to Privatizing: increased crime and alcohol
abuse
oPros to Privatizing: jobs created, better locations
The Regulator Role:
oGov’t economic regularities:
Impositions of constraints to modify economy
Ex: Food and Drug acts, Hazardous Products
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ADMS Notes CH.8
oImperfect Competition:
Business supply responsive to consumer demand
By allowing individuals to follow self interest they’ll be responsive
to consumer needs and capability of the environment
Business aim to reduce competition as a means of prospering and
succeeding
Consequently inefficient businesses will remain, and consumers
will be forced to accept those types of products or services, at prices
dictated by those businesses
Overall society is offered fewer goods they really want, as opposed
to high competition which is good
oThe Public Interest:
CRTC-canadian radio tv and telecoms
Regulates telecoms’ industry and its carriers (ie: Bell )
Responsible for broadcasting licences, requiring other
companies to conform to the standards
Competition Burea 8.4:
Fair competition:
oEconomy works more efficiently
oAdaptability to global markets
oChance for newcomers
oConsumer choice and competition
oBalances interests of all players
Price Fixing
Bid Rigging: prearranged biddings illegal
Misleading rep: false ads
Deceptive prizes
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