Monday, December 3 , 2012
Mid-Term Exam Review Study Questions
SOSC 1200 – Canadian Problems
Part A: Short Answer Questions
Six of these terms will be on the exam, need to define five. Must explain significance to the course.
1.) Marilyn Waring: Former feminist member of New Zealand parliament with strong
economic and environmental views (Marilyn Waring was the youngest Member of Parliament to
date at the time). She was very critical about modern economics specifically towards the
calculation of/importance given to the Gross Domestic Product. Waring argued that the GDP is
not an accurate representation of the progress or overall well-being of a region, puts too much
emphasis on financial gains, and that it is given too much importance. She stated that GDP does
not take into account women’s unpaid work (child bearing, raising a child, managing a house
hold), or activities that may benefit or harm nature (the ones which harm nature are usually
more beneficial to the GDP). She Is the subject of the documentary “Who’s Counting” and
wrote the book “If Women Counted”, both of which discuss these topics at length.
She is significant as she raised important questions regarding GDP and the market and if
there is a better way to calculate a region’s wellbeing/success, while taking these factors
into consideration to ascertain a more realistic representation. Also paved the way for
the Canadian Index of Wellbeing.
2.) National Policy 1879: An economic policy that was first introduced by John A. Macdonald and
the Conservative party to raise tariffs (consistent to the conservative based mercantile system);
it was enacted in 1879 (it was later used to refer to the entire conservative/Tory platform at the
time including increased immigration to Western Canada and the development of the Canadian
Pacific Railway’s Transcontinental Line). The aim of this policy was to provide a disincentive for
Canadian citizens from buying American goods in hope to encourage them to purchase goods
manufactured in Canada. This action would cause some disrepair towards the American
economy at the time (as Canada was their primary trading partner), and strain trade relations
between the US and Canada. This policy was very popular among Canadian citizens (except
among Western Canadians), and was a key element for the Conservative party being elected
and staying in power for the next 20 odd years.
This is significant because it showcases how the federal government uses policy
instruments to try and influence the well being of a country’s economy, and make their
industries more profitable. Currently, the United States and Canada have a free trade
agreement in place in the form of NAFTA (North American Free Trade Agreement) which
disallows tariffs. Although, instances of non-tariff barriers arise where the government
provides a seemingly unfair advantage to Canadian companies, making it difficult for
American companies to compete with them (Ex. Reduced stumpage fees, high
unemployment insurance rates in relation to east coast fishing, questionable technical standards on Canadian products stating that they are the only ones to safely use in
3.) Reform Liberalism: Reform liberals are a centralistic political ideology that contains some of the
same ideals as classical liberals (but many differences), and are more ideologically situated
towards the left or socialist side of the political spectrum than classical liberalism. Reform
liberals believe in the greatest happiness for the greatest number; that the key to a countries
success is not purely in matters economic, but for the collective success of their citizens (rather
than individual). The government needs to be accountable for every citizen, and assist them as
such. They believe that the government has a responsibility to facilitate this success through
redistribution of wealth and instatement of various public policies as so each citizen can live up
to their “true full potential”.
This is significant as it shows the general shift and mixing of political ideologies
throughout the ages. Previously, classical liberalism saw a greater emphasis on
individual economic success and limited government powers. The introduction of
reform liberalism aims to change this by providing a greater emphasis on collective
success and government facilitation to achieve this. It shows how societal perceptions,
values, morals, and beliefs change overtime and the parties touting themselves as
liberal or conservative, may not meet the classic definition of that term.
4.) Responsible Government: Is a model of government that is based on the parliamentary system
of governmental accountability. It is comprised of three parts, the legislative branch (tasked
with “making” laws), consists of the House of Commons and Senate in Canada), the executive
branch (tasked with implementing and enforcing laws, consists of the Prime Minister and his
Cabinet in Canada), and the judicial branch (tasked with interpreting and applying the law,
consists of the Supreme court, Provincial court, and the Court of Justice). It is seen as a “fusion
of powers” as the executive branch of government is part of the legislative branch; they must
hold the legislations confidence or risk losing power as a result.
This is significant because it outlines the form of government which is in place in Canada
today that we adopted and adapted from England, which contains historical significance
in itself. As such, England still holds positions in our federal government (although
mostly ceremonially) in the form of the Sovereign. The Sovereign consists of the Queen
of England (who is the formal Head of State of both Executive and Legislative branches),
and the Governor General (who represents the Queen in Canada and carries out her
duties as Head of State). It is important to understand the functions of Responsible
Government in order to critically evaluate the government and compare our
government to other models (such as the Separation of Powers model). 5.) Quiet Revolution: A term used to describe a rapidly growing sense of regionalism, widespread
embracing of separatist values, and adoption of beliefs of a French-Canadian culture that started
to take place in Quebec starting in the 1960’s. This began when the provincial government
started to inherit more responsibilities and powers (previously controlled by the Roman-Catholic
Church) at the time, and began to push for more policies that were beneficial to Quebec and
French-Canadians as a whole (Ex. Calls for greater subsidies, French to be the only official
language in Quebec).
This is significant because this occurrence was catalyst for massive insurgence of
Quebec regionalism. Currently, Quebec has a very strong sense of regionalism, believing that
they are a separate culture entirely and should not even be a part of Canada. The separatist
political party in Quebec (the Parti Quebecious) has gained a great deal of traction over the
years and has been integral in the perpetuation of these beliefs. To help quell these beliefs, the
Federal government tries to be accommodating with Quebec, by trying to enact polices to
appease them. Although, this creates discontent with the other provinces who think that the
Federal government is far to accommodating to Quebec.
6.) Aggregate Demand: Is defined as the total amount of demand for final goods and services in the
market at any given time and all possible price levels. It is measured through the aggregate-
demand curve, which describes the relationship between price levels and the quantity that firms
are willing to provide (there is usually a negative relationship between aggregate demand and
price level). Aggregate demand is measured through the formula Consumption + Investment +
Government spending + (EXports – IMports) =Aggregate Demand.
This is an important concept in order to better understand the function of the market,
consumer trends, and how to accurately measure each. It can also help to determine
and predict instances in inflation and deflation. The amount of money borrowed can
also have a direct effect on aggregate demand (which has become an increasing
problem recently with the rise of credit cards and other borrowing tools).
7.) Governing (Policy) Instruments: Government instruments are described as a principle or rules
enacted by the government in which to guide decisions made by citizens to rational outcome or
desired effect. They aim to ensure compliance and support of their people without actually
enacting a law to reach the result they are trying to achieve. This could be done through taxes,
exhortation, expenditures, regulation, etc.
This is significant because it helps us to understand how the government indirectly aims
to affect the decisions and practices of their citizens without directly enacting a law
banning an act, service, or item out right or seeming over intrusive (although, the
government may do such at times Ex. Prohibition). The government has used such
practices to drive down instances of smoking, or reducing unemployment in an attempt
to force people back to work. This can be seen as “legitimate coercion” and looked upon
with a sense of distain. 8.) Classical Conservatism: Classical conservatism is a political ideology that situates itself on right
side of the political spectrum. People following this ideology believe that tradition, divinity, and
morality are paramount to a well functioning society, they detest change. Followers of classical
conservatism believe that humans are created unequal and that only so much can be done in an
attempt to equalize society and its people. The conservatives believe that humans would tear
each other apart if left to their own devices and the government needs to direct and regulate
them as such.
This is significant as it showcases an important political ideology that Canada adopted at
one time (to some extent). When the parliamentary system was first enacted, classical
conservatism was the political ideology that the government used at the time. Through
shifting moral and political views over the years, this ideology was less widely accepted
for a more centralistic and left form of government.
9.) Linkages: Are industries that link the different industries of a country together (primary,
secondary, tertiary). It is where the industries in an economic sector provide the necessities for
another. This can either manifest itself as either forward linkages (When the products of one
industry is used as the raw material for another. Ex. Timber for furniture) or backwards linkages
(When the products of one industry is used to help benefit into the extraction of raw materials.
Ex. Better quality tools, work boots).
This is significant as it directly relates to the market and how the production of certain
goods and services can go to benefit a country. Also, it states how the country can invest
back into itself in order to become more successful.
10.)Transfer Dependency: Are horizontal imbalances between the provinces in the form of how
much money is being gifted to them (in the form of equalization payments) in comparison to
how much money is being given back to the federal government. This practice creates
dependency towards those handouts and makes some provinces economically unstable.
Furthermore, other provinces who may provide a great deal of money will taking a great deal
less than other provinces (like that of Alberta and Newfoundland) may feel like this practice is
very unfair, creating higher senses of regionalism and discontent towards to federal
government. (Quebec being given a high amount of equalization payments, while most of the
Western Provinces and Newfoundland receive none).
11.)Creative Destruction: It is a term in economics which one industry/product/service is seemingly
destroyed to make way for a new form industry/product/service to take its place. This is usually
done through various social, economic, and technological advancement that takes place year
after year as society as a whole changes. An example of this would be a company such as
Microsoft holding a monopolistic like position for years in the field of personal computers,
basically destroying countless companies with other forms of personal computers. As such,
personal computers also destroyed the market for other devices to produce print or video (such
as the type writer or the reel projector). 12.)Polity: Polity is a model of government first created by Aristole (although it was the subject of
Thomas Hobbes’s book Levithan) in which he thought was the most perfect form of
government. A polity involves a ruling by a mixed group of people and classes so no one class is
able to proclaim power over another (he states that if a society is unable to do this, then it
should be the middle class who should hold the power). Aristotle thought that this would
balance out the ideals of the oligarchy (rule by the rich) and democracy (rule by the poor).
Aristole thought that these two forms of government were “deviant” and were destined for ruin
or failure. These views are interesting to not because a stable democracy is a form of
government which almost all modern society strives for. Aristotle believed that the inferior class
was not meant to have great power, that they would reach too far out of their grasp as they felt
lesser and wish to ramify this. As such, he did not believe democracy would work (starkly
different with today’s views).
13.)Western Alienation: Is the notion that the Western Provinces in Canada (British Columbia,
Alberta, Saskatchewan, and Manitoba) have been alienated and in some respects excluded from
the mainstream media. It is the belief that the majority of the attention goes towards the
central provinces of Ontario and Quebec, and that the Western Provinces are not given the
same amount of incentives (in the form of economic stimulus and political power) and feel
maltreated as such. Western Canadians feel they make a very significant contribution to Canada
as a whole and wish to be treated with the respect and recognition that the contribution they
make demands. This leads to growing senses of regionalism in these provinces which feel that
they are not being appreciated (Alberta, at times, has expressed interest in separating from
Canada, but this instances are few and far between).
14.)Revenue/Responsibility Imbalance: Is a situation where there are instances of inequality
between the revenue powers and expenditure responsibilities of a government. This can arise
through vertical imbalances (which are imbalances between two levels of government, such as
provincial and federal) and horizontal imbalances (imbalances between the same level of
government, which can relate to regional disparity). Vertical imbalances are usually solved
through re-assignment of revenue and expenditure responsibilities (as it is a structural issue)
and horizontal imbalances are usually solved through equalization transfers between provinces,
overseen by the federal government. This can create problems as to what level of government
pays for what service (such as healthcare), how much money is given to each province (if any at
all) and from where, and how these responsibilities and finances are distributed accordingly.
This can cause strain on different levels of government economically and have effects on views
15.)Immiseration: Is a theory coined by Karl Marx that refers to the nature of capitalistic success
logically requires an even greater reduction in “real wages” and worsening the working
conditions for the proletariat (working class). He argued that exploitation is necessary for the capitalist in order to minimize financially unbeneficial costs associated with his enterprise, to in
order to achieve the maximum amount of financial gain possible. He viewed this process as an
inevitability due to the inherit fixation of monetary gain of the bourgeoisie. Presently, these
types of views can still be seen in third world countries where sweat shops and child labor still
exists. But in places like Canada, such action is not easy to implement due to laws in place
forbidding such action (to some extent). Furthermore, some businesses view that treating your
worker with a greater amount of care and providing him/her with various benefits makes for a
more productive work force and a more profitable business.
16.)Meech Lake Accord: The Meech Lake Accord was a number of proposed amendments to the
Constitution of Canada negotiated in