Chapter 3: Decision Making
1. External trade policy is an exclusive competency of the EU; this is justified in the theory of fiscal federalism by: a. scale economies
b. diversity in local preferences
c. negative spillovers
d. local informational advantages
2. What is the theory about optimal allocation of tasks to different levels of government called? a. Qualified majority voting
b. Fiscal federalism
d. Social solidarity
3. The Federal Government of Canada is seated in Ottawa and is headed by the Governor General of Canada on the advice of the Prime Minister. Its responsibilities include: a. defence
b. criminal law
c. employment insurance
d. postal service
g. trade regulation
h. external relations
i. money and banking
l. Indian affairs
For each if these responsibilities, discuss how appropriate it is to be carried out by the federal government as opposed to provincial governments.
4. Discuss and compare the following assertions:
a. The Canadian Constitution specifies that every issue not mentioned as belonging to the provincial or territorial governments comes under the power of the Federal Government. b. The tenth amendment of the US Constitution requires that the powers not delegated to the United States federal government by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people. c. The European Union shall act within the limits of the competences conferred upon it by the Member States in the Treaties. Competences not conferred upon the Union in the Treaties remain with the Member States. d.
5. For each of the following issues (a) decide if strong, soft, or no regulation is necessary, and (b) use fiscal federalism and subsidiarity methods to determine at what level of government the issue should be addressed (federal, state/provincial, or local government). Explain the costs and benefits...
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