Activity 1 page 2

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Government involvement in an economy can vary greatly from nation to nation. The values of society and its government are reflected in how much the government is involved.

The mixed economy of Canada has a combination of private ownership and government involvement. Canada's economic system is in the middle of an economic continuum.

In the market economy of the United States, government is less involved. This is represented by the position of the United States economy on the right of the economic continuum.

Click on the link below to view the "Government Involvement" information to review the connection of economic systems and government involvement.

Economic Continuum diagram


Governments get involved in the economy to ensure that public good is maintained. For the public good, the government funds goods and services that it feels benefits everyone in society, such as education and health care. Depending on the values of the nation, a government can have a small role or a very large role in making these economic decisions.

public good: the view of what is best for a group, community, or nation

Read pages 205, 206, and 208 of the textbook, Issues for Canadians, to determine how government may be involved in ensuring that the public good is achieved.

As you continue through the activity, consider how Canada and the United States provide for the public good.

In Canada, the government is quite involved in the economy. In this mixed economy, the government values being involved in the economy to ensure economic success. The government makes many laws and policies that reflect how the economy should operate. Government in Canada also collects taxes to assist in paying the costs of the public services it provides.

The values and attitudes of Canada today are reflected in some important historical moments.

You should have noted that where a government sits on the economic continuum depends on which political party is in power. When the Liberal Party is in power, as from 1963 to 1968, the economic decisions shift left, and when the Conservative Party is in power, as from 1984 to 1993, the decisions shift right along the continuum. This is a result of political parties having different economic values.

Complete the Government Involvement in the Economy chart by clicking on one of the links below. Identify how the Canadian and United States governments are involved in the economy.

(Note: You will complete the first six rows of the chart now and will return to the handout later in the activity to complete the remainder.)

Government Involvement in the Economy (Word)
Government Involvement in the Economy (pdf)
Government Involvement in the Economy (Google Doc)

Save your chart to your Activities folder.

shift left: on an economic continuum means more government involvement in the economy

shift right: on an economic continuum means less government involvement in the economy


Vocabulary

Add the key words public good, shift left, and shift right to your Issues for Canadians Definitions handout.  Write definitions of the key words in your own words.

As you continue to investigate economics, add symbols and icons to your definitions as you develop an understanding of these terms.

Save your updated handout to your Activities folder.

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