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Intro to Business > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

what is the role of government in business?

A

to implement rules, regulations and policies that businesses operate within and safeguard the interests of the customers

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2
Q

why does the government have an invested interest in encouraging business?

A

so they can tax the businesses and keep the economy competitive in the global market

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3
Q

name the seven government involvements in business?

A

crown corporations
laws and regulations
the bank of Canada
taxation and financial policies
government expenditures
purchasing policies
services

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4
Q

what are crown corporations?

A

companies that are owned by the federal or provincial government

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5
Q

why were crown corporations created?

A

provide services that were not being provided by businesses at the time

to bail out a major industry in trouble

provide services that would not be provided by private businesses

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6
Q

name 5 of 9 crown corporations?

A

Canadian deposit insurance
Canada pension plan investment board
air canada
Canadian national railway
bank of canada
canadian human rights museum
canadian royal bank
CBC

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7
Q

what is privatization?

A

the process of selling publicly owned corporations to a private business

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8
Q

who creates laws and regulations for businesses?

A

politicians and government officials who have been elected by canadians

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9
Q

how does the political party in power affect the business environment?

A

they affect the business environment by the decisions and policies they make

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10
Q

laws are derived from 4 what sources?

A

the constitution
precedents established by judges
provincial and federal statutes (laws)
federal and provincial agencies

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11
Q

what kind of government system does canada have?

A

federalist

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12
Q

who has the final decision on constitutional questions and important civil and criminal cases?

A

the Supreme Court

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13
Q

name 10 of 11 responsibilities that the federal government may have that could impact business?

A

trade regulations
incorporations of federal companies
taxation (direct and indirect)
the banking and monetary system
hospital insurance and medicare
public debt and property
national defence
unemployment
immigration
criminal law
fisheries

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14
Q

the federal government can make unlimited ____ and _____?

A

unlimited laws and taxes

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15
Q

what level of government oversees
aeronautics
shipping
railways
telecommunications
atomic energy?

A

federal government

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16
Q

what is the role of marketing boards?

A

to control the supply or pricing of certain products

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17
Q

name five agricultural marketing boards in Canada?

A

canadian dairy commission
canadian egg marketing agency
chicken farmers of canada
canadian turkey marketing agency
canadian broiler hatching egg marketing agency

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18
Q

name 10 of 11 roles of provincial government in business?

A

regulation of provincial trade and commerce

natural resources within their boundaries

direct taxation for provincial purposes
incorporation of provincial companies
licensing for revenue purposes
the administration of justice
health and social services
municipal affairs
property law
labour law
education

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19
Q

name 10 of 11 services the municipal government provide?

A

water supply
sewage and garbage disposal
roads
sidewalks
street lights
building codes
parks
playgrounds
libaries
food service regulations
zoning requirements

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20
Q

is the bank of canada a crown corporation?

A

yes

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21
Q

who does the bank of canada provide its services on behalf of?

A

the bank of canada provides services on behalf of the federal government

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22
Q

what are the 3 goals of the monetary policy?

A

minimize inflation and preserve the purchasing power of the Canadian dollar

maintain real out put to its real potential (try to keep 1 dollar worth 1 dollar)

regulate the external value of the canadian dollar in foreign exchanges

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23
Q

the government wants to _________ the economy and growth ?

A

stimulate

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24
Q

what is the monetary policy?

A

the monetary policy is a set of decisions that the government makes through its central bank (bank of canada) regarding the amount of currency available in the economy

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25
Q

if the bank of canada interest rates goes up how will this affect commercial banks interest rate?

A

it will raise the commercial rates

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26
Q

If commercial bank interest rates raise how will that affect asset prices?

A

it will lower asset prices because people will less likely to take a loan out to purchase an asset there for lowering the price so assets will go down so that they sell

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27
Q

what is the overnight rate?

A

the rate that commercial banks set for customers or other commercial banks when they borrow money from them

28
Q

how often does the overnight rate change?

A

daily

29
Q

what is the policy rate/ bank rate?

A

the rate that the Bank Of Canada (BoC) sets for borrowing money from them

30
Q

who would deal with the bank of canada?

A

commercial banks and canadian government

31
Q

if the economy is struggling what will the BoC do to help it?

A

lower policy rate so the commercial banks will drop the overnight rate to increase borrowing and spending and they can increase the money supply

32
Q

when the overnight rate drops will the demand for credit go up or down?

A

firms and households will increase their demand for credit

33
Q

when the overnight rate drops will the credit supply go up or down?

A

commercial banks will increase their credit supply

34
Q

what will the BoC do when inflation rates are rising?

A

they will raise the policy rate so the overnight rate will go up so spending will slow down and slowing inflation

35
Q

how does the policy rate affect the overnight rate?

A

the overnight rate will normally rise and fall with the policy rate

36
Q

when the policy rate rises how will that effect the demand for credit?

A

it will lower the demand for credit by households and firms

37
Q

when the policy rate rises how will that effect the commercial bank credit supply?

A

the commercial bank credit supply will decrease

38
Q

when inflation is high how will that effect borrowing?

A

there will be a decrease in borrowing do the to raising policy rate and overnight rate

39
Q

what does the federal government rely on for revenue?

A

income tax and other tax revenue

40
Q

what does the provincial government rely on for revenue?

A

income tax and sales tax

41
Q

what does the municipal government rely on for revenue?

A

property tax

42
Q

what is the fiscal policy?

A

how the government collects and spend tax dollars

43
Q

what is the first half of the fiscal policy?

A

involves taxation. high tax rates tend to slow the economy, drawing money away from the private sector and remitting it to the government

44
Q

what is the second half of the fiscal policy?

A

government spending

45
Q

is the fiscal policy a government stabilization policy?

A

yes using taxes government purchases as its tool

46
Q

why are stabilization policies implemented?

A

to reduce ups and downs in the business cycle

47
Q

how does an expansionary fiscal policy effect taxes and government spending?

A

government spending increases and tax rates decreases to stimulate spending

48
Q

how does a contractionary fiscal policy effect government spending and tax rates?

A

government spending decreases and increase tax rates to restrain spending

49
Q

what will cause a reduction in national debt?

A

a surplus of revenues

50
Q

what is monetary policy?

A

the management of the money supply and interest rates

51
Q

who controls the monetary policy?

A

the bank of canada

52
Q

when the money supply grows how will that effect the economy?

A

more money is available to businesses and others so the economy grows faster

53
Q

what happens to the economy when the bank of canada lowers the money supply?

A

the economy slows

54
Q

what are some of the services that governments spend huge sums of money on?

A

education
health
roads
ports
waterways
airports

55
Q

who is the largest purchaser of goods and services in canada?

A

the government

56
Q

who will the Canadian government most often award contracts to?

A

canadian businesses even if they are more expensive than non canadian bids

57
Q

what does industry canada regulate?

A

food ingredients
clothing labels
measurement accuracy of scales
fuel pumps

58
Q

what does the national research council (NRC) do?

A

responsible for research and development regarding science and technology to innovate and keep canada competitive in the global market

59
Q

what does global affairs canada do?

A

maintain embassies and consulates overseas

conduct trade missions

60
Q

what does development bank of canada (BDC) do?

A

provide small and medium sized businesses with flexible financing, affordable consulting services and venture capital

61
Q

what does export development canada (EDC) do?

A

provides canadian exporters with financing, insurance and bonding services as well as foreign market expertise

62
Q

what does the CIDC do?

A

insures all deposits in financial institutions up to 100,00 dollars

63
Q

how do provincial governments protect consumers?

A

regulate the stock exchanges in canada and setting the rules for all public companies

64
Q

name 6 ways that municipal governments protect consumers?

A

inspect buildings
set zoning regulation
license businesses
tax water
charge fees
regulate parking

65
Q

what Is the role of the provincial government in business?

A

workers comp
labour regulations
liquor sales

Intro to Business (25 decks)

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