1. Mixed Economy
Social 9 - Chapter 6

2. Mixed economy Most economies in the world today are mixed
Classification is based on how much government intervention there is
Economic system in which both the STATE and PRIVATE SECTOR direct the economy
Reflects characteristics of both market and planned economies

3. Canadian example
• Stabilization of the economy to prevent booms and busts
(Monetary Policy)
Control of bank interest rates
Control $ supply
(Fiscal Policy)
Increase or decrease taxes
Increase or decrease government spending
BANK OF CANADA

4. Government Laws & Regulations
Agriculture
Govt. marketing boards
Influence prices
Crop controls
Quotas to limit production
Food inspection
Negotiate sales of wheat to foreign nations
Regulation of the Market
Quality controls
Some price controls
Prevention of monopolies to preserve competition
Deregulation
A reduction of govt. restrictions on business enterprises. (neo-conservatives)

5. Redistribution of Wealth to Provide Security
Old age pension
Unemployment insurance
child tax credit
Welfare
Provision of Financial Support to Businesses
Subsidies to failing businesses
Provision of public services (universality)
Schools
Police
Fire control
Hospitals
Parks
Etc.

6. Government Owned Business
Crown Corporations (nationalized industry)
CBC Radio and TV
Royal Canadian Mint
Canada Post Corporation
Reasons…
Control an area of the economy which is vital to general welfare of nation.
To provide goods/services private entrepreneurs are unable to provide.
Earn income for the government.
To rescue companies from bankruptcy.
Help stabilize economy.

7. Privatization
Keynesian Methods (deficit financing) created a $580 billion dollar deficit by 1996.
Canadian govt. began cutting social programs.
Selling of state owned companies to private industry. (Thatcherism/Reaganomics)
Create more efficiency in govt.
Cut bureaucracy in govt.
Mulroney
Privatized 39 crown corps.
Provincial Government - Alberta
Liquor
Licensing
Telephone

9. Direct Taxes: Those paid by citizens. (GST/Income tax)
Indirect Taxes: Hidden in the price of goods. (excise tax)

10. There are many direct and indirect controls over our economic system.
The good news is that these many government programs and regulations have provided us with increased stability, security, and equality.
The bad news is that we have lost some individual freedoms and that the cost to taxpayers is high.