《THE CANADIAN ECONOMY AND ITS PROBLEMS THIRD EDITION》

1. The Canadian Economy3

Scarce Resources3

The Production Possibility Curve5

How Basic Decisions are Made10

Tradition11

The Command Economy11

The Market System12

Key Words and Important Concepts25

For Review25

2. Some Other Economies27

The American Economy27

Solving the Production Problem29

Solving the Distribution Problem30

The Soviet Economy31

The Government Sector33

The Business Sector37

Agriculture42

Households44

Assessment45

The Yugoslav Economy50

The French Economy52

Conclusion53

Key Words and Important Concepts54

For Review54

3. Goals, Guidelines, and Policies57

Six Goals of the Canadian Economy59

Economic Stability60

Growth62

An Equitable Distribution of Income64

A Viable Balance of Payments66

Economic Freedom68

Efficiency: The Proper Allocation of Resources70

Conflict Among Goals73

Key Words and Important Concepts75

For Review75

4. The National Scoreboard77

Economic Indicators78

The Unemployment Rate79

Price Indexes83

Other Indicators87

The National Accounts: Income and Expenditure88

Definition89

The Components of Gross National Expenditure91

Problems in Using National Accounts93

The Circular Flow Model96

Key Words and Important Concepts111

For Review111

5. The Money Supply113

Money in Canada114

The Money Supply in Canada115

The Problem of Instability118

The Chartered Banks119

Fractional Reserves120

The Creation of Money121

The Bank of Canada130

Responsibilities131

Techniques of Central-Bank Control132

Appendix to Chapter 5142

Key Words and Important Concepts145

For Review145

6. Stabilization Policies147

Monetary Policy148

Tight Money149

Easy Money151

Problems in Using Monetary Policy152

Fiscal Policy156

The Federal Budget157

Stabilizers161

Problems of Using Fiscal Policy165

The Trade-off170

Monetarists Versus Non-monetarists173

The Public Debt174

The Size of the Debt176

The Creditors178

Problems Caused by the Public Debt178

Key Words and Important Concepts181

For Review181

7. Growth183

The Meaning of Growth183

The Benefits of Growth184

The Costs of Growth186

Growth and the Environment187

Exhausting of Resources188

Welfare Considerations189

Other Costs189

Factors Contributing to Economic Growth192

The Quantity of Resources192

The Productivity of Resources197

Key Words and Important Concepts205

For Review205

8. Income Distribution207

Who Gets What?207

The Distributive Shares207

Incomes of Family Units209

How the Shares are Determined210

Poverty in Canada212

Social Security Policy220

Who Pays What?223

Equity in Taxation226

Key Words and Important Concepts232

For Review232

9. Regional Distribution of Income235

What Region Gets What?236

Quebec237

The Atlantic Provinces241

Projects to Reduce Regional Disparities245

Regional Economic Expansion246

Transportation Subsidies249

Manpower Mobility Program250

Federal-Provincial Fiscal Arrangements251

Key Words and Important Concepts254

For Review254

10.Some Microeconomic Tools: A Digression257

Setting Price258

Costs258

Revenues259

The Optimum Price261

Changing the Offer266

Advertising to Increase Sales267

Price Makers and Price Takers272

Demand273

Diminishing Marginal Utility274

Individual Demand275

Market Demand276

The Law of Demand278

Elasticity of Demand279

Costs and Supply281

Costs of Production282

The Cost Curves286

Individual Supply287

Market Supply290

The Market Price in Pure Competition291

The Equilibrium Price291

Changes in the Equilibrium Price294

Profits and Losses295

The Profit-maximizing Output295

The Profit Position296

The Spectrum of Markets299

Pure Competition299

Pure Monopoly301

Monopolistic Competition303

Oligopoly303

The Spectrum: A Continuum304

Key Words and Important Concepts305

For Review305

11.Workers and the Distribution of Income307

The Price of Labour307

The Demand for Labour308

The Wage Rate309

Unions in Canada317

The Structure of Unions317

Collective Bargaining320

Third-Party Intervention in Dispute Settlements322

Work Stoppages322

Issues in Industrial Relations323

Key Words and Important Concepts329

For Review329

12.Trade and a Viable Balance of Payments331

The Gains from Trade332

Absolute Advantage332

Comparative Advantage333

Arguments Against Free Trade335

The Costs of Protection337

The Balance of International Payments340

The Current Account341

The Capital Account344

The Foreign-Exchange Rate347

Inverting the Ratio349

The Demand for American Dollars350

The Supply of American Dollars350

Changes in the Exchange Rate351

Flexible Exchange Rates352

Pegged Exchange Rates354

Foreign Aid356

Canadian Development Assistance358

Key Words and Important Concepts363

For Review363

13.Foreign Investment365

Foreign Investment and the Goals of the Economy365

The Growth of Foreign Investment in Canada369

Multinational Enterprises370

Some Facts and Figures372

Canadian Direct Investment Abroad373

The Benefits and Costs of Foreign Direct Investment374

The Benefits374

The Costs376

The Performance of Foreign-Owned Subsidiaries377

Extraterritorial Application of Foreign Laws380

Government Policies Relating to Foreign Direct Investment383

Measures to Restrict Foreign Direct Investment383

Measures to Improve Cost-Benefit Ratios385

Measures to Encourage Canadian Ownership387

Key Words and Important Concepts391

For Review391

14.Consumerism and Government Control of Business393

Consumerism393

Contributing Factors394

Organizing Consumers396

Consumers' Rights398

Maintaining Competition403

Corporate Concentration403

Why Maintain Competition?405

Performance as a Criterion of Competition408

Devices to Lessen Competition409

Government Regulation of Business411

The Combines Investigation Act411

The Issue of Regulation417

Other Government Controls419

Key Words and Important Concepts423

For Review423

15.Issues in Resource Allocation425

Manufacturing in Canada425

Industrial Structure425

Productivity in Manufacturing426

The Deficit on Current Account in Manufacturing435

Energy436

Fossil Fuels: A Nonrenewable Resource438

Impact on the Environment442

Pricing Policies444

The Federal Presence in the Energy Industry452

Agriculture453

The Technological Revolution454

Short-Term Fluctuations in Prices456

Equity in Income Distribution458

Efficiency of Resource Allocation in Agriculture465

Key Words467

For Review467

16.Conflict: A Problem of the Canadian Economy469

Federal-Provincial Conflicts469

Conflicts Among Goals471

Economic Freedom472

Equity in Income Distribution474

Growth475

A Viable Balance of Payments476

Stability: Unemployment and Inflation477

Problems of the 1980s480

Key Words and Important Concepts484

For Review484

Index485