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Unformatted text preview: Economics and Business Economics and Business in the Era of Neo Conservatism
Lecture Seventeen History 113 Economic Conditions 1970 Economic Conditions 1970 Economic Problems = Change in focus towards increasing Canada’s global economic competitiveness Stagnation: Decline in economic growth rates Inflation: Rising inflation 70s and 80s Economic Conditions 1970 Economic Conditions 1970 Unemployment: Rising unemployment rates 1970s – “Stagflation” High Interest Rates Deficits and Debt: Government deficit rises by 1970s Consumer debt rising Economic Problems after 1970 Economic Problems after 1970 Why?: Globalization: Increasingly Canada part of a global economy Problems of Competition: Canadian Business faces competitive problems in a world economy “Restructuring” Energy Crises Demographic Factors (Federal Debt to GDP) NeoConservatism NeoConservatism New theories about economy and role of government “the view that it was necessary to increase marketplace control over the economy and reverse the extensive state interventionism of the post1945 period” Argued that gov’t intervention had led to rigidities and inefficiencies in western economies. Need to improve efficiency and thus the supply of goods and services, rather than stimulating demand. Government Response Government Response Brian Mulroney and Conservatives 198492 Reduce Government spending/Debt: Cuts to Civil Service Cuts to Social Services Tighten money supply: Bank of Canada (1981, 1988) Raises Interest Rates Government Response Government Response Incentives to Business Activity: Reduce Corporate taxes Free Trade Agreement 1987: Removal of Tariffs on all Primary and Secondary Goods (in 10 years) Free Trade in Services Gradually Removal of Barriers Like Quotas and Content Regulations NAFTA ...
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- Fall '09