Chapter 12 Flashcards
What is legal tender?
Money allows businesses to operate and consumers to buy products and services that meet their needs and wants.
Forms of Legal Tender
Coins and bank notes are classified as legal tender by the government of Canada and must be accepted as payment for goods and services.
Coins are minted (manufactured) at the Royal Canadian Mint branch in Winnipeg
Bank notes are designed by the Bank of Canada and are printed by private, high-security printing companies
Why is it said that money’s true value is its purchasing power?
Purchasing power is the value of a currency expressed in terms of the number of goods or services that one unit of money can buy. It can weaken over time due to inflation. That’s because rising prices effectively decrease the number of goods or services you can buy.
Why are security features important for money?
Canada’s newest bank notes have state-of-the-art security features to discourage high-tech counterfeiting, is the production of fake money.
What is counterfeiting?
Counterfeiting is the unlawful duplication of something valuable in order to deceive. Counterfeit items can include money, coupons, credit or debit cards, clothes, and jewelry.
What is comparison shopping?
Comparing price, quality, features, and services helps consumers make smart purchases.
What is a clearance sale?
Retailers often have clearance (end-of-season) sales where seasonal goods are sold below the regular price to clear out old stock and to make room for new items.
What is budgeting? Why is it important?
A budget is a plan for smart spending and savings based on one’s income and expenses.
Personal budgets can be kept daily, weekly, and even monthly.
- Many people avoid budgeting because they believe that it is too difficult, or it will limit their enjoyment of life.
- Learning to budget can actually help them find money for the things they really want or need.
What is Gross Income, Disposable Income, Discretionary Income?
Gross income is the total amount of money received by a person before any deductions.
Disposable income, or take-home-pay, is the amount of income that is left after deductions of income tax, Canada Pension Plan (CPP), and Employment Insurance (EI).
Discretionary income is the amount of money that is left over after all necessities have been paid. Necessities consist of rent or mortgage, food, transportation, insurance, electricity, and so on.
What is Fixed Expenses, Variable Expenses, Necessities?
Necessities are the total of all expenses or something that you must have or do.
Fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments. Some kinds of taxes, like business licenses, are also fixed costs.
What is a variable expense, Fixed expenses generally cost the same amount each month (such as rent, mortgage payments, or car payments), while variable expenses change from month to month (dining out, medical expenses, groceries, or anything you buy from a store).
