1 | Define the nature of Canadian business and identify its main goals.
THE CONCEPT OF BUSINESS AND PROFIT
- An organization that seeks to earn profits by providing goods and services.
- The money that remains (if any) after a business's expenses are subtracted from its revenues.
- The money a business spends producing its goods and services and generally running the business. Also referred to as “costs.”
- The money a business earns selling its products and services. Also referred to as “sales.”
2 | Describe different types of global economic systems according to the means by which they control the factors of production through input and output markets.
ECONOMIC SYSTEMS AROUND THE WORLD
- The study of how businesses, people make choices about:
- What things to produce/consume
- How best to produce things
- How best to distribute wealth.
- economic system
- The way in which a nation allocates its resources among its citizens.
Factors of Production
- factors of production
- The resources used to produce goods and services: labour, capital, entrepreneurs, and natural resources.
- The mental and physical training and talents of people; sometimes called human resources.
- money, or machines and technologies that money can buy.
- computers, phones, hammers, tractors
- The funds needed to operate an enterprise.
- a major source of capital for small businesses is a personal investment by owners, which can come from individual entrepreneurs, from partners who start businesses together, or
from investors who buy stock
- An individual who organizes and manages labour, capital, and natural resources to produce goods and services to earn a profit, but who also runs the risk of failure.
- natural resources
- Items used in the production of goods and services in their natural state, including land, water, mineral deposits, and trees.
- information resources
- Information such as market forecasts, economic data, and specialized knowledge of employees that is useful to a business and that helps it achieve its goals.
Types of Economic Systems
- command economy
- An economic system in which government controls all or most factors of production and makes all or most production decisions.
- market economy
- An economic system in which individuals control all or most factors of production and make all or most production decisions.
- A type of command economy in which the government owns and operates all industries.
- A kind of command economy in which the government owns and operates the main industries, while individuals own and operate less crucial industries.
Market Economies - A mechanism for exchange between the buyers and sellers of a particular good or service.
- Individuals owns/control all factors of production
- Individuals make 100% of economic decisions
Mixed Market Economies
- Individuals own/controls majority of factors
- Individuals make most of economic decisions
- Governments regulate and tax, run some business
- Example: Canada, USA, UK, France
- The transfer of activities from the government to the public sector.
- A reduction in the number of laws affecting business activity.
INTERACTIONS BETWEEN BUSINESS AND GOVERNMENT
How Government Influences Business
Government as Customer
- the government is the largest purchaser of advertising in Canada
- many businesses depend on government purchasing, if not for their survival, at least for a certain level of prosperity
Government as Competitor
- government also competes with business through Crown corporations, which exist at both the provincial and federal level, and account for a significant and wide variety of
economic activity in Canada
Government as Regulator
- federal and provincial governments regulate many aspects of business activity, also through their decisions, which sometimes business people feel is unfair in the way it performs
its role as regulator
- government regulates business through many administrative boards, tribunals, or commissions
- there are several important reasons for regulating business activity: protecting competition, protecting consumers, achieving social goals, and protecting the environment
Government as Taxation Agent
- taxes are imposed and collected by federal, provincial, and local governments
- revenue taxes
- Taxes whose main purpose is to fund government services and programs.
- progressive revenue taxes
- Taxes levied at a higher rate on higher-income taxpayers and at a lower rate on lower income taxpayers.
- regressive revenue taxes
- Taxes that cause poorer people to pay a higher percentage of income than richer people pay.