Sociology 323
Economy & Society
February 7 – Jim Stanford Part
4
Video About Money
The Money Myth
Question From Previous
Class - Gender Wage
Gap
Wage Gender Gap Controversy
Canadian Parliament
Statistics Canada
Wages - Pipelines
Overview of Midterm
Exam
The midterm exam will consist of 3 parts.
1. Definitions – Answer 10 of 11
2. Short answer – Answer 2 of 3
3. Essay Questions – Answer 1 of 2
Time allocated for each part.
1. Definitions – Answer 10 at 5 minutes = 50 min
2. Short answer – Answer 2 at 7.5 minutes = 15 min
3. Essay Questions – Answer 1 at 15 minutes = 10 min
Total = 75 minutes
Overview of Midterm
Exam
You need to study:
Coursepack – Karl Polanyi: The Great Transformation, Chapter 4 and 5
Book – Jim Stanford: Economics for Everyone, Part 1 – 4
Power Point Lectures available at:
http://erikchevrier.ca/course/economy-and-society
Examples of Questions
Definitions:
Depreciation
Externalities
Transfer Payment
Short answer:
Please name 4 out of the five activities performed by profit
seeking companies that are socially useless.
Essay question:
What does Karl Polanyi think of Adam Smith's view that
the division of labour in a society is dependent upon the
existence of markets?
Money and Banking
Modern money comes in many shapes and sizes:
- Currency
- Deposits
- Credit
Money has many economic uses:
- Means of payment
- Unit of account
- Store of value
- Facilitates exchange
Money is important to capitalism. In capitalism:
- Accumulating money became the goal of production
- In initiating production, new money is created
- Private-profit seeking financial institutions control the
creation and destruction of money
Money
A Simple Hierarchy of Money (Perry G Mehrling)
Inflation, Central Banks
and Monetary Policy
Price Level – Overall level of absolute prices in a society.
Inflation – Increase in the overall level of absolute prices in a
society.
Deflation – Decrease in the overall level of absolute prices in a
society.
Nominal wages – wages measured in dollars.
Real wages – purchasing power of wages. Accounts for
inflation and deflation.
You can measure inflation with various measures like the
Consumer Price Index
Causes of Inflation
The following factors can lead to inflation:
1 – Demand-Pull Inflation – Results from excess spending
2 – Higher labour costs
3 – Higher profits
4 – Rise in raw material costs
5 – Can be self-fuelling
Central banks try to control inflation through monetary
policy
Bank of Canada
Bank of Canada Video
Monetary vs Quasi-Monetary Policies
Stock Markets,
Financialization and
Pensions
In order for companies to grow, they need investments to
maintain their fixed and working capital expenses.
These can come in the form of:
– Loans
– Bonds
– Equities
Finance capital has become a major factor in the world
economy.
Pension Plans
Pay-as-you-go plan
Pre-funded
Defined contribution