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Transcript of Mindmap
To What Extent do Different Economic Systems Affect Quality of Life
The Economy and People
How Economies React to Cultural Identity, Job Creation and Protection , and Workers' Rights.
How do these Decisions Affect Quality of Life
How Decisions about Scarcity, Supply and Demand, and Competition Affect Individuals and Groups
Economics is the study of production, distribution and consumption of goods and services.
Economic System is the society's organization of the production, distribution, and consumption of goods and services.
Economic Continuum is the scale that can show the economic system of a country. However, the positions do not always stay the same, based on the political party, the country's economic system would shift.
As seen from before, Canada is a mixed economy, therefore it controls some of the corporations in Canada. These companies are called Crown Corporations. Crown Corporations were created to provide products and services to Canadians. It also aims to...
Supply and Demand
The amount of supply compared to demand affects our quality of life because it affects the price of the products, the availability of it, and the jobs that are related to creating the products.
So if we decide to have a less demand for a certain supply, then the supply would increase, and the price would decrease.
At this point, shops would try to give out the better deal to attract us to buy more. And so, we will probably be given a better choice to buy the product!
Economics affects the income people make and the jobs they have. It also determines the amount of taxes they pay to the government.
If people suddenly stop buying, our economy will go down because it is dependent on the amount of spending by consumers. When this happens, many people will become unemployed!
Economic systems try to supply us with the materials we need by making sure that the production level and distribution level is good enough to support the needs of the citizens. An important aspect the economic system must consider is the supply vs demand. When the demand is more than the supply, the situation is known as SCARCITY.
Since resources such as money, labor, and materials are limited, not all the things that people want can be produced in a sufficient amount that satisfies the population.
To solve these problems...
What is needed/wanted?
How will it be made/produced?
Who will get it?
The Land includes materials from nature.
The people that contributes their mental and physical effort into producing goods and services.
The money that people own or borrow to buy tools and resources to make or produce the goods and services.
Principles that Shape Planned, Mixed, and Market Economies
Private ownership and government control
In mixed economies, the amount of control given by the government depends on the political party
Some resources are privately owned and some are publicly owned
Individuals and government has the make decisions regarding production.
Consumers and the government can impact economic decision making.
Private Businesses own and manage their own resources, there is no government involvement in a pure market economy.
The consumers make decisions whether to buy their products or not.
All resources are privately owned
Individuals can decide how to use the resources
Individuals can influence the economic decision making by choosing what to buy.
The government makes all the decisions regarding scarcity.
Owns and manages all the resources to produce things.
Therefore, it decides what will be produced, and how to use the limited resources
All resources are publicly owned
Consumers have little to no influence on economic decision making
Supports "a mix of the public and private sector" -- Liberal Party Website
Believes that individuals should set aside their interests and work for the public good. Canada values equality.
Achieving what is best for each individual = The overall good for society. U.S. values individual creativity and independence.
"Peace, order and good government."
Reflects idea of cooperation
Cooperation in Canada can be seen by the government's decision making in the economy, as its decisions will influence everyone.
Canadians still own private property and the government does too, therefore it is a mixed economy.
Liberal Party wanted more control, therefore they decided to have publicly funded health care and pensions for seniors in 1963-1968.
Conservative Party wanted less involvement, so they proposed cuts to government spending, privatized crown corporations, and increased the influence of the U.S. and Mexico in the Canadian market through the North American Free Trade Agreement (NAFTA) in 1984-1993.
"Life, liberty and the pursuit of happiness."
Principle reflects individualism due to the origins of becoming independent from Britain.
U.S. values the role of the individuals in economic decision making.
President Roosevelt from the Democratic party gave pensions to seniors, funds to farmers, and created corporations so that it created jobs for people and helped build the future economy.
President Reagan from the Republican party wanted government to be less involved in the economy, so he reduced government spending and government regulation of corporations.
How do the founding principles of Canada and the U.S. answer the question of the public good differently? How have Canada and the U.S. answered the question differently at different points in their histories? Why?
While Canada believes that the cooperation of society will ultimately lead to the overall public good of the country, the U.S. believes in a principle that is completely opposite. The U.S. trusts that achieving the best for each person is equivalent to the overall public good for their society. As each country has faced different conflicts in the past, the economic system has shifted many times in order to face the issues effectively. When Canada changed its political party, each Prime Minister decided to change its economic system to fit what they think is best for Canada. In U.S., the conflicts and the change in the political party influenced their economic system. When the U.S. was facing the Great Depression, Franklin Roosevelt took more control over the economy to help fix the problems that the country was facing. For example, he gave out funds to the farmers, so that they will have the money to farm.
Because Canada has such a diverse population, it is bound to treat them all equally through the Charter of Rights and Freedoms. Therefore, it is not unexpected that Canada's principle highlights a theme of equality, and so, Canada has a mixed economy in order for the people to have rights that are equal to the government's. The U.S. has a principle based on individualism and this is due to the fight for independence from Britain. Because of this, we can see that the United States completely thinks that an economy should be controlled by individual consumers.
How might the history of Canada and the U.S. shape the values and attitudes of the two countries?
To provide crucial services.
To promote economic development.
Support the Canadian culture and its identity.
Canada still owns many Crown corporations such as Bank of Canada and CBC. I think Crown corporations should play an active role in Canadian society because it would not be using companies to earn money for themselves, but instead, it would try to benefit the whole country.
What Crown corporations does Canada have today? To what extent should Crown corporations play a role in Canada's economy?
The Canadian government also assists the Canadian film industry by giving them money so that they can advertise the Canadian culture and identity. Without the government, Canadians would not have any TV shows, books, magazines and more because the Canadian audience is simply too small. This shows that the Canadian government is very committed to help build up the identities of both individuals and collective.
At the same time, there are also people who don't believe the films are useful because nobody actually watches it. And yet, the people still have to pay taxes for it!
Jennifer Podemski is an Aboriginal actress and she thinks that the government's support for filmmakers is very beneficial for her people. Because of the funds, she is able to tell her story to the country and she believes that it helps strengthen her identity. She also thinks that it will enrich Canadian's culture .
How does the economy affect the employment rate?
When the chocolate factory in Smiths Fall closed down and moved to Mexico, it aimed to build a new company in order to increase the efficiency. But this has caused every worker there to lose their jobs, and will negatively impact the economy because the lost jobs and lost tourism will decrease the income received by stores and restaurants.
From a mixed economist's perspective, the government should have control over companies to limit job loss. Private companies only want the best for themselves, and will hardly consider the people that work for them. To increase the employment rate, the government can buy factories that are not doing well financially, or they could fund new business ventures to employ people. A market economist however, thinks that private companies can make good decisions about jobs because it knows what products people really want and need. If someone loses their job, it means that they are working for a company that is not supplying people with the products and services they want. The government only tries to protect and create jobs, which ends up with everyone paying taxes while the private companies would understand how to meet the demands of consumers and fabricate a better idea that will make jobs for everyone.
Responsible citizenship involves responding to issues and building a society in which everyone belongs -- individuals and groups. How is responsible citizenship different in mixed and market economies? How can economic systems have different strategies for creating jobs? How do jobs create opportunities for people to "belong"?
In a mixed economy, companies owned by the government would not just care about the profit they earn, but instead, their major purpose would be to create services and products that will benefit Canadian society and will also aim to create more jobs at the same time. In a market economy, the main goal would be to earn more and more money for themselves. But like the U.S., they will believe that the money they earn will contribute to creating a better country. To create more jobs in a mixed economy, the government can buy a financially unstable company and move it in the right direction, so that the people will not lose their jobs. For the market economy, private companies will be able to react to consumer demand in a creative way and this will contribute to creating more jobs for the public. When people have a job, they will have a position in the workforce, and so they will belong to a new community. The workforce will also create an opportunity for people to meet new friends and work hard to create a better economy for the country. Therefore, they will belong to a community that has a contribution to the country.
What are the Principles of Market Economics?
In a state of equilibrium, the amount of supply can meet the demand at a certain price.
When the demand increases, the supply will most likely decrease, forcing the price to go up because consumers are competing to buy it.
When the price goes up, less people will be able to afford it, and the demand will go down, making the supply increase.
When the supply goes up, the price will go down because there is more than enough. Therefore, the producers will cut down the prices to encourage people to buy more. The cheaper the price, the more encouraged the customers are to buy it.
Usually, equilibrium happens when the producers supply as much as consumers will buy while making a price that will help them gain the most profit.
What if the supply of a product went down? How would that affect price and demand? What might cause the supply of a product to drop.
When this happens, consumers would risk losing the product in their lives because the demand of other consumers would increase, and the price would also increase because they would compete to buy it. Some factors that will cause the supply to drop would be a decrease in resources (labor, materials, natural resources), and the lack of resources could also be affected by natural disasters.
Why might demand for a product go up? For example, what role might marketing play in demand?
The latest trends and the introduction of a new, useful product that catches the attention of consumers will cause the demand of a product to go up. Marketing and advertising will help increase the popularity of the product and therefore increase the demand.
Competition is the rivalry between companies to get consumers to buy their products.
The values of CUSTOMERS and the decisions that the government makes in decisions about supply and demand can actually impact the competition in an economic system.
How has competition between the shops affected the variety and price of products available to you? How might this affect your quality of life?
To increase the amount of money earned by the shops, the shops would try to give out a variety of better products in order to attract consumers to buy the product from their shop. Therefore, we will have more choices when buying products! Also, another method that is popular when competing would be to lower the prices for the same product so that more customers would buy from the cheaper shop. This would ultimately benefit us because we have the same product but at a cheaper price.
How has competition affected the decisions the shops have made about resources? What impacts might these decisions have on you and your family or friends?
Again, to increase the amount of money the store earns, they may try to use better resources. For example, they may want better people to work for them, or they may want better materials that will enhance the quality of the product. Either way, the final product will be improved, and we as consumers will get to buy products that are better than before.
Why Governments get Involved in Market Economies
Monopoly= When one producer controls all of the supplies of a product/service.
The government makes a monopoly to control extremely important services that require expensive infrastructure (the organizational structure that builds the company).
e.g. the Canadian Wheat Board in Canada sets the price of wheat so that it will protect wheat growers from low market prices.
By using a monopoly to handle wheat, Canada is limiting competition so that the farmers will be protected from low market prices. As seen, Canada is acting upon its principle, which states that individuals should consider each other. But if private companies handle the price of wheat, the farmers will be cheated upon. So, it is best that Canada has a monopoly for wheat.
How do government decisions that affect competition in an economy reflect values? Use an example.
Governments get involved to inform, protect and ensure good practices. Sometimes, they get involved if they think consumers are not treated fairly.
Two examples would be the B.C. government starting its own auto insurance program because private insurers made it too expensive.
The second one is the Canadian government's interference of decreasing the price of chocolate through increasing competition by incorporating the Competition Act, which states that the goal is to "encourage competition in Canada in order to... provide consumers with competitive prices and product choices."
To what extent do you agree with the involvement of government in each of the examples?
I agree with the government's involvement in the previous examples. I think that the government took a right action to solve these problems. Because of their involvement, we as citizens have a better quality of life as we are benefited from the good choices the government provides us with.
Why do strikes happen? How do they affect quality of life? From whose perspective?
Strikes happen because workers are not satisfied with something related to their jobs, for example, the wages, or an unfair working environment. However, their course of action may affect the citizens' quality of life because they tend to organize a large group of people and walk down the streets holding signs. This might slow down our traffic and cause traffic jams, resulting in many people having their schedules delayed. Also, since many workers will not be working, our services will also be in a hiatus.
Workers organized labour unions so that they can represent their needs to employers. Unions help make collective bargaining possible.
Unions organize workers into groups so that they can pressure employers about wages, working hours and other componenets that contribute to a comfortable working environment. One form of pressuring is through strikes.
Due to the existence of unions, Canada now has labour laws, and it helps establish the right for workers to form unions. It also explains the bargaining procedures for unions and employers through setting the standards of wages, hours, safety and more.
Factors that contribute to wages and working conditions...
Unions can influence the wages and conditions of unionized jobs.
Labour shortages can increase the wages because each business would try to compete to get people to work for them.
Economic slowdowns will decrease the wages because the companies will have to pay less to workers in order to survive.
If employers provide jobs for workers, and workers provide employers with labour, why do employers and unions need to bargain with each other?
Because the employers would always want to give out less money to the employees due to their own desire to have a higher profit. But if the two parties negotiate, they will find a deal that would be mutually beneficial.
A mixed economist on unions
unions should be thanked for their contribution in achieving a fairly paid, and safe working environment for their workers.
Unions balance the power of employers because the employers used to have too much power in economic decisions, as they could decide how long they would work and how much they earned.
Labor laws were passed to change this by recognizing the rights of workers and gave them the right to form unions, establish working conditions and gave them rules for bargaining.
A market economist on unions
Unions should not be too powerful because they will make demands that will not be good for the economy.
If unions make employers pay more to their employees, the companies might just move from Canada to another country.
A strike closing down a company is unacceptable.
Winnipeg General Strike
Happened after World War I and two years after the Russian Revolution.
During this time, many people had a hard time finding a job.
Also during the Russian Revolution, workers joined together to overthrow the Russian government.
The Canadian government was fearful of the power of the unions, and so they made arrests. 1 died and 29 were injured as the police rode their horses straight into the crowds
The Supreme Court's decision about collective bargaining represents an interpretation of the Charter of Rights and Freedoms, and establishes collective bargaining as a right protected by the Charter. In what way does this decision reflect values that underlie political and economic decision making in Canada?
Canada believes that the society has to respond to the needs of others as a first priority. And so, by making collective bargaining a right, it is showing that the needs of the employees will at least be considered and negotiated.