Income Management Flashcards
What is Canadian Currency?
Since 2001, the Bank of Canada has been updating bank notes with sophisticated security features. In Canada’s culture, the queen and prime ministers are depicted on banknotes.
What to do with counterfeiting?
If you have a counterfeit bill:
Report it to the police - it is against the law to keep a counterfeit bill without lawful reason.
If someone passes you a counterfeit bill where you work:
You may ask them for a different bill if you feel it is counterfeit. Inform them of your concerns and suggest they contact the police.
Counterfeits are often of poor quality - the counterfeiters are banking on you not paying attention.
What is money?
Money allows businesses to operate and consumers to buy products and services that meet their needs and wants.
Our currency is classified as legal tender by the government of Canada and must be accepted as payment for goods and services.
Coins are minted and banknotes are issued as paper money.
What is purchasing power?
Money’s Changing purchasing Power
banknotes and banknotes have no true value. The paper is worthless as are the metals to make coins.
Both are only important to consumers because we accept that currency or money has a standard value that allows them to purchase items or invest. Since prices tend to rise, consumers’ money buys them less every year.
What is Income?
Income is money that an individual or business receives from sources, such as wages or sales, interest, and dividends.
What is gross income?
gross income is the total amount of money received by a person before any deductions.
What is disposable income?
Disposable income, or take-home pay, is the amount left after income tax deductions, Canada Pension Plan (CPP), and Employment Insurance (EI).
What is discretionary income?
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 money management?
Money management is the daily financial activities aimed at satisfying a person’s needs and wants within a limited income.
Individuals need to carefully spend, save, and plan their money to get the most out of it.
What influences why purchases are made?
Five key factors that influence consumer buying decisions include:
income and price
Status
current trends
custom and habits
Promotion
What is impulse buying?
Buying without comparison shopping
What is comparison shopping?
Comparison shopping means shopping around before a purchase is made
Items to compare for
a) price and quality; which means selecting the least expensive product or service that best meets the consumer’s needs and wants
B) features: The features of goods and services are often the most important requirements for consumers when they purchase these items.
