Income Management
What is Money?
What is Income?
Personal Money Management
Business Money Management
What is Money?
• Under federal law, money is legal tender
that must be accepted as payment for
goods and services.
• Coins
• Bank of Canada
Notes (bills)
Coins
Minted, or manufactured, at the Royal
Canadian Mint in Ottawa or the Mint’s
Winnipeg branch
The Government of Canada decides
when,and if, to issue new coins.
Example:
The government replaced the $1 and $2 paper notes
with coins in 1987 and 1996 respectively.
Coin Fact
The Mint in Winnipeg produces 15 million
coins each day. That is 750 coins per
second.
Bank Notes (Bills)
Issued by the Bank of Canada
Bank of Canada does not own its
own facilities to print bank notes.
Two privately owned, highsecurity printing companies are
used.
Money’s Purchasing Power
Paper used to print our money is not
worth its assigned value.
Metals used to make coins are virtually
worthless.
Just a few cents of metal is used to
make a toonie.
Why is money worth anything?
Purchasing Power
Purchasing Power
• The amount for which one can purchase the
same good or service changes over time.
Example:
A Caramilk chocolate bar was once
less than 50 cents. Now it’s a little
more than a dollar.
• Today, $10 purchases much less than it did 30
years ago.
Purchasing Power
Inflation
A term used to describe when prices
increase over time for goods and
services.
Purchasing Power
Consumer Price Index (CPI)
It measures the purchasing power of
money and is the measurement of
inflation or deflation.
CPI is determined monthly by Statistics
Canada.
It takes into consideration 600 products
typically purchased by Canadian
households and includes food, shelter,
transportation, clothing, and recreation.
How much does it cost to purchase that same
basket of goods and services over time.
Inflation Calculator
http://www.bank-banquecanada.ca/en/rates/inflation_calc.html
Source
• Wilson, Jack et al. The World of Business,
5th Ed., Nelson Education Ltd., Canada,
2007