The Role of Government in the Economy
Promoting a Stable Market
Environmental Protection
Prevent Price Fixing
Crown Corporations
Labour Laws
Drawbacks of Government Involvement In the Economy
Ensuring the Safety of the Consumer
An agreement between sellers in a market to sell a good or service for a fixed price
The Competition Act prevents companies from price fixing and promotes competition to ensure the best price for the consumers.
A crown corporation is a company owned by the government, it is structured like a privately owned business
They fulfill a need that would not make any profit or to promote Canadian culture and identity
Eg. CBC, Canada Post
Laws to protect workers and employees
They are important to ensure safe work environments, so no one gets hurt doing dangerous things
The protection of the environment is important so that plants and animals may flourish in a way that will allow all species to thrive and let us as humans have a higher chance of survival
Canadian Environmental Protection Act (CEPA)
Role of Health Canada
Responsible for national health policy
Set regulations for companies that produce goods for consumption
Require clear display of nutritional value of food on packaging
Require cigarette companies to warn people of potential harm
Unsafe products sometimes slip into the market, if this happens the government can force the company to issue a recall
Role of CSA
Intends to reduce or prevent injuries and illness in the workplace
Excessive government involvement may allow the government to take advantage of its citizens in a way that would only benefit certain groups. For example, the government may choose to create a monopoly that would be beneficial to certain groups and would allow those said groups to have unfair advantages against other people. Collusions may also take place because of excess government interference because certain groups may bribe the government/politicians so that those groups could have greater power within the economic system
Excessive government involvement in the economy may distort market mechanisms and may hinder the growth of the economy.
A monopoly is when a company or group has complete control over the supply of a product or service
Monopolies are bad because the group may choose to inflate the prices which is bad for consumers, especially in the case that the product is a necessity
The Hudson's Bay Company had a monopoly on beaver furs.
Excess government interference could cause inefficiencies within the economy because of the added bureaucracy to oversee government programs that stem from economic policies.