Question 1

The 2015-2016 budget allocated billions of dollars in equalization payments to ten provinces.

Accepted Answer

The 2015-2016 budget allocated equalization payments to only six provinces, not all ten, as equalization payments are only given to provinces with below-average fiscal capacity.

Question 2

Crown corporations can be found in all provinces.

Accepted Answer

Crown corporations are government-owned businesses that operate at arm's length from the government. They exist in all provinces and territories in Canada.

Question 3

In special,unplanned but important cases threatening the survival of a major company,the government has a policy of non-intervention.

Accepted Answer

The statement is not entirely accurate. In some countries, the government may intervene to save a major company if its collapse threatens the overall economy or national security. However, in other countries, the government may adhere to a policy of non-intervention in such cases. So, it depends on the specific country and its regulations.

Question 4

Equalization is viewed as a means of maintaining the same level of taxation across Canada,although the level of services provided will vary.

Accepted Answer

Equalization is intended to enable provinces to provide comparable levels of public services at comparable levels of taxation, not to maintain the same level of taxation across Canada.

Question 5

Monetary policy is directly under the control of the Bank of Canada.

Accepted Answer

Monetary policy is the responsibility of the Bank of Canada, which sets the target for the overnight interest rate and controls the money supply in order to achieve its inflation target.

Question 6

Federal and provincial policies favouring Canadian businesses are being modified as a result of having NAFTA in place.

Accepted Answer

NAFTA has led to modifications in federal and provincial policies favoring Canadian businesses. This is because NAFTA aims to promote free trade between the three countries involved, thus requiring changes in policies to eliminate trade barriers and ensure a level playing field for businesses.

Question 7

Monetary policy involves the level of government spending.

Accepted Answer

Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates in order to achieve macroeconomic goals such as price stability, full employment, and economic growth. It does not involve government spending, which falls under fiscal policy.

Question 8

The economic goal of monetary and fiscal policy is to keep the economy growing.

Accepted Answer

The ultimate goal of both monetary and fiscal policy is to maintain economic growth by managing factors such as inflation, unemployment, and overall economic stability.

Question 9

Canadian financial institutions faced the same high mortgage default rates as were found in the United States.

Accepted Answer

This statement is false. Canadian financial institutions did not experience the same high mortgage default rates as the United States during the global financial crisis in 2008-2009. This was due to stricter lending regulations and generally more stable housing market conditions in Canada.

Question 10

Taxes come from a variety of sources.

Accepted Answer

Taxes can come from various sources such as income tax, sales tax, property tax, corporate tax, etc.

Question 11

Since Canada was formed in 1867,the federal government has played a significant role in the economy through its laws and regulations.

Accepted Answer

Since its formation, the federal government of Canada has played a significant role in the economy through its laws and regulations, including the establishment of policies related to trade, taxation, and social programs.

Question 12

Canada's first prime minister is responsible for the National Policy which placed high tariffs on U.S.imports to protect Canada's fledgling companies.

Accepted Answer

Canada's first prime minister, Sir John A. Macdonald, was responsible for implementing the National Policy in 1879, which aimed to protect Canadian industries by imposing high tariffs on imports from foreign countries, especially the United States.

Question 13

Fiscal policy refers to the federal government's efforts to keep the economy stable by controlling the amount of money in circulation.

Accepted Answer

The answer of Fiscal policy refers to the federal government's...

Question 14

Transfer payments are direct payments from governments to other governments.

Accepted Answer

The answer of Transfer payments are direct payments from governments...

Question 15

Some government aid goes to help industries or companies that are deemed to be very important.

Accepted Answer

This is true. Governments may provide aid to industries or companies that are deemed critical to national security, infrastructure, or employment. This is often done through subsidies, tax breaks, or loans.

Question 16

During the subprime mortgage crisis the Bank of Canada continued to raise its lending rate.

Accepted Answer

During the subprime mortgage crisis, the Bank of Canada actually lowered its lending rate to stimulate the Canadian economy and mitigate the impact of the crisis.

Question 17

In the United States,people holding subprime mortgages found that at the end of their term,interest rates were much higher and they couldn't make their payments.

Accepted Answer

This is true. Many people with subprime mortgages were given low introductory interest rates that then increased significantly, making it difficult for them to make their monthly payments. This was a significant contributing factor to the subprime mortgage crisis of the late 2000s.

Question 18

The government has a large and elaborate system to help companies in their exporting activities.

Accepted Answer

The government of many countries has established trade promotion organizations to help companies in their exporting activities. These organizations provide a range of services such as market intelligence, trade missions, trade fairs, and matchmaking services to connect companies with potential buyers or partners. Additionally, many governments offer financial and non-financial incentives to encourage companies to export, such as export finance, export credit insurance, and trade agreements with other countries.

Question 19

Municipalities set certain zoning requirements on businesses including height and distance from the road of all buildings.

Accepted Answer

Municipalities have the authority to set zoning requirements for businesses, including limitations on building height and setback distances from roads and other properties.

Question 20

The federal government has a "buy foreign" policy when it comes to significant military acquisitions.

Accepted Answer

The federal government has a "buy American" policy when it comes to significant military acquisitions.

Quiz 4: The Role of Government in Business Appendix a Working Within the Legal Environment of Business