MGMT 1P93 Lecture Notes - Lecture 4: Planned Economy, State Ownership, Monopolistic Competition
30 Mar 2015
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Document Summary
The goal is controlled sustainable growth through fiscal or monetary policy. Fiscal policy: relates to changing taxation rates and government expenditures in order to affect the economy. Monetary policy: relates to changing interest rates and the supply of money in order to influence the economy. M1 money supply: all currency, paper bills, plus chequing account and travelers cheques. M2 money supply: all m1 items, plus savings accounts, money market accounts, and certificates of deposit. Banks multiply money, they add savings accounts and loans together. Provides banking services for the government and other banks. Free market: private ownership, economic freedom, fair competition and innovation and hard work. Works on the idea that competition is in the best interests of the economy. Right to own a business and keep after tax profits. Supply: the amount producers are willing to supply at a certain price, as price goes up, supply goes up.
