Today more than ever in Canada, the government has a significant impact on national markets through the taxes that they impose, the implementation of both price ceilings and price floors, and also through production quotas placed in certain industries. There are other factors that also allow the government to influence the markets, however the aforementioned ones are by far the most influential and the most important to delve into. A market is essentially anywhere that a good or service can be exchanged between both a buyer and a seller at a price agreed upon by both parties. A typical example of a market would be the stock market, where stockbrokers buy and sell shares of companies at prices upon which both parties agree. However, even a local general store is a form of market as well. With that being said, it is easy to begin thinking about all the ways the government influences each and every kind of market; thereÃÂs thousands of different ways.
Tax
Punch cartoon (1907); illustrates the unpopularity...
English: Further documentation of the data contain...Something as simple as a duty being placed on a certain product can cause waves of change in certain markets. In effect, any change the government imposes in a market will have drastic consequences, which is why they have such an influence over our national markets more than any other financial entity ever can. With all of this in mind, it is a good idea to take a look at one of the most effective forms of influence the government uses, taxation.
The governmentÃÂs influence on markets through taxation is strong due to its policies on the taxation of goods and services as well as income. Taxation is used to maximize the welfare of the population, as the capital gains achieved by the government are typically retained and recycled back into society through forms of...