Short Answer Questions

Question 1

Identify and describe what the four life cycles are in a financial sense, and how they impact goals

Answer 1

Early years (until mid 30s)
-creating emergency fund
-saving for down payment on house or condo
-purchase life insurance
-start thinking about retirement
Middle years (mid 30s to mid 50s)
-focus on building wealth by paying down mortgage and increasing savings and investments
Middle years (50s+)
-focus on providing adequate retirement fund
Retirement years
- focus on the efficient management of previously acquired wealth

Question 2

What are two causes of inflation

Answer 2

Demand pull inflation: demand for goods or services increase but supply remains the same, pulling up prices
Cost push inflation: supply of goods or services is limited in some way but demand remains the same, pushing up prices

Question 3

What are the six steps to decision making

Answer 3

Define the problem
Create a criteria on how you will rank your options
List alternatives
Evaluate the options with a chart
Make the decision
Reevaluate and learn

Question 4

What are the eight categories for CPI

Answer 4

1. Food and beverage
2. Housing
3. Household operations/furnishing/equipment
4. Clothing/apparel
5. Transportation
6. Recreation, education, and communication
7. Medical care
8. Alcoholic beverages: tobacco products/ recreational cannabis

Question 5

What is the recommended level of inflation

Answer 5

2%

Question 6

What does each letter mean in SMART goal

Answer 6

Specific
Measurable
Achievable
Relevant
Timely

Question 7

How does the bank of Canada try to influence inflation

Answer 7

• Print more money and loan government money
• change bank of Canada interest rates