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Inflation And Crown Corporation

Decent Essays

1. Inflation

Definition of Inflation: Inflation is the overall increase of prices for products which leads to lower purchasing power.

Example: I purchase a set of bakery goods at a bakery for $200, a year later, the same set of goods at that bakery cost me $210 (increase in prices and lower purchasing power). Thus, I experience a 5% inflation rate and I need to spend more money to purchase the same set of goods at that bakery.

2. Crown Corporation

Definition of Crown Corporation: Any organization that is legally separate from its owners (corporation) that is created, and structured by a nation’s government or state to serve the public’s needs and interests.

Example: An example of a Crown Corporation is BC Hydro as it is a corporation …show more content…

Moreover, it dictates overnight interest rates and hence, also has control of the collection of market interest rates. Moreover, the Bank of Canada is also a supplier of money to commercial banks through a payment of their assets if they run out of money.

Example: An example of how the Bank of Canada influences the economy is that it may serve to increase the money supply in an effort to lower interest rates and borrowing costs to boost consumption, investment and the economy in an effort to combat recession. Moreover, it also serves to manage public debt, foreign exchange reserves, and safe, secure transactions. Not only that, but it also plays a role in designing, distributing, and issuing money.

4. Monetary policy

Definition of Monetary policy: Monetary policy includes the decisions of a central bank, currency board or other organizations/groups that can also make an impact on the country’s money supply and the general economy.

Example: During a recession. the Central Bank and other related organizations that are part of Monetary policy, may decide to increase the money supply which lowers interest rates and borrowing costs. Thus, there’s a boost in consumption and investment which stimulates and creates an impact on the …show more content…

Example: An example of a sales tax is the PST (provincial sales tax) which is a compulsory fee levied by the provincial government on many products.

8. transfer payments

Definition of transfer payments: A transfer payment is a redistribution of money/wealth by the government to the less fortunate/entities with less - the government doesn’t receive any money or product in return.

Example: An example of a type of transfer payment are Equalization payments imposed by the Canadian government as money is distributed by the federal government to provinces that aren’t as wealthy (the have-not provinces) with an objective to guarantee “equal” levels of health care, education, and social welfare among the provinces. Moreover, payments are based off a comparison between per capita revenue of a province and the national per capita.

9. national debt

Definition of national debt: National debt is the overall amount of borrowing that the central/federal government has left to pay back to its creditors (include both domestic and

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