lecture1 - Weeks 1 and 2 1. What is this course about? 1....

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Weeks 1 and 2 1. What is this course about? 1. Ideas and Definitions 2. Ideas: Role of Government in Society 1. What does Government Do? 1. Government is big. 2. What makes government different from firms? 1. Not profit maximisation--could have other goals. 2. Has coercive power; membership is not voluntary (except, eg, choice of citizenship, location. ..) 3. What makes it better? 1. Same 2 things. 1. Sometimes the invisible hand gives you a big punch in the gut--profit maximisation can have bad results. 2. Sometimes we don't want to do what is right, so coercive power can have good results. 4. What makes it worse? 1. Same 2 things. 1. Sometimes profit maximisation is really great. 2. Sometimes coercive power is misused. 5. Public Education 1. Why should you get a big subsidy? 2. Why don't we make grade 1 kids pay? 3. Why should you pay anything at all? 6. Public Debt 1. Definitions: debt, deficit, tax, revenue, expenditure. 2. What and why. 3. How much and when. 7. Evaluating Government 1. Definitions: Unemployment, Inflation, GDP, Output, Interest Rates, Poverty, Inequality, Goodness-in-general. 2. How have we done? 8. Public Health Care 1. Why and why not. 2. How much and when. 1. How Big is the Government? 1. Guesses? What does government do? 2. (At least) Three definitions: 1. Production 1. Are the producers direct government employees? Are they indirect government employees (eg, employees of contractors)? Are they just not government employees? 2. Financing 1. Is government the sole financeer for the commodity? If there is shared financing, is it obligatory or voluntary?
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3. Regulation 1. Government can affect economic activity without financing it or producing it by regulating it. Sometimes, regulation is shared, eg, BC Medical Assn. Sometimes, regulation is effectively private, eg, oil industry in USA these days. 4. Gov't Produced Privately Produced Gov't Financed hospital doctors non-hospital doctors Privately Financed car insurance; electricity most restaurants 1. Financing 1. federal government gets money from you. 1. personal tax (tax forms in May) 2. corporate tax (charged to firms, usually quarterly)--you don't really perceive it 3. GST 4. import duties (stuff from foreign countries) 5. energy taxes (gas is expensive) 6. excise taxes (liquor, smokes) 7. air travel 8. payroll taxes 1. Employment Insurance 2. Canada Pension Plan--off the Govt of Canada books because it is separately accounted for 9. other revenue includes crown corporations and government investments 1. eg Canada Post (crown corp), PetroCan (former crown corp, now an investment) 2. federal government writes a lot of cheques. 1. Federalistas do a lot of 'transfers to persons' 1. Old Age Security; Canada Pension Plan (off-budget); Employment Insurance. 2. and 'transfers to other levels of governments'
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lecture1 - Weeks 1 and 2 1. What is this course about? 1....

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