The Canadian Economy Basic Canadian Economic Principles

Canadian Economy  Canada’s economy is structured as a mixed economy  Our economy is also based on the fact that people have needs and wants  Canada is a country rich in natural resources  Canada is a nation which encourages entrepreneurship

Goals of the Canadian Economy  Expanding the economic output in order to increase the standard of living  Use Canadian resources efficiently and not wastefully  Achieve a high level of employment  To achieve an equitable distribution on the output produced and the income earned in the economy Source: Economic Council of Canada

Demand Demand  Demand refers to consumer willingness and ability to buy products Law of Demand  As the price of a good increases, the demand for that good decreases

Supply Supply  Supply is the amount of goods producers are willing to make and sell Law of Supply  As the price of a good increases the supply of that good increases as well

Economic Principles 1. Low supply of a desired product usually means high consumer demand 2. When the supply of a product that consumers want is low, marketing is not as important a business activity as when the supply of such a product is high

Economic Principles 3. When consumer demand is high, excessive marketing is not needed since the product will sell itself 4. When supply is high for a product, consumer demand for the product is lowered and marketing becomes an important factor for the organization to be profitable

Economic Definitions Surplus  A surplus occurs when supply exceeds demand Shortage  A shortage occurs when demand exceeds supply Equilibrium  When the amount of product being supplied is equal to the amount of product being demanded

Economic System The way a government and businesses work together to provide goods and services to consumers The way a government and businesses work together to provide goods and services to consumers Three Major Economic Questions: Three Major Economic Questions: 1. What goods and services to produce? 2. How should these goods and services be produced? 3. For whom should the goods and services be produced?

Pure Command Economy This is also known as communism This is also known as communism The government owns the natural resources, farms, factories, machinery, offices, and most businesses The government owns the natural resources, farms, factories, machinery, offices, and most businesses The government controls all decision making The government controls all decision making

Pure Market Economy Also called Free Market, Free Enterprise or Capitalist System Also called Free Market, Free Enterprise or Capitalist System The actions of buyers and sellers of goods and services direct the market The actions of buyers and sellers of goods and services direct the market Consumers decide what will be produced by the dollars they spend Consumers decide what will be produced by the dollars they spend

Modern Mixed Economy Most modern day economic systems are mixed economies Most modern day economic systems are mixed economies These are a combination of the two previous systems These are a combination of the two previous systems In Canada, a majority of businesses are free to produce what goods and services they like, however, there are also government regulations that they must adhere to In Canada, a majority of businesses are free to produce what goods and services they like, however, there are also government regulations that they must adhere to

Independent Work Read pages 63 – 64 and answer the following questions Read pages 63 – 64 and answer the following questions 1a, 1b, 2a, 2b, 3a, 3b 1a, 1b, 2a, 2b, 3a, 3b