1. The Canadian Economy
Boring…why do we need to know about the economy? I thought this was a course about money.

2. The BaraniukBucks™Challenge
According to Economy Watch, Canada has the ____ largest economy based on GDP.
2nd
3rd
9th
21st
GDP means Gross Domestic Product. To calculate this, they add up the total value of all that is produced in a country’s economy and divide that by the number of people. It is one way to measure a nation’s productivity.

3. What is an economy?
The term economy refers to the wealth and resources of a country or region.

4. Why should I care?
Some aspects of our emotional world are linked to our economy (i.e. happiness is…)
Our society is shaped by the type of economy in our country
Our economy produces goods and services that you use
Our economy creates jobs
Canada’s economy is linked to the economies of other nations (we must compete for sales, investment and lending)
The global economy is very competitive (there are now more nations competing with us than ever before)
Source: Rabbior, Gary, Canadian Foundation for Economic Education (

5. What does an economy need to function?

6. Domestic Private Economy
Economic Consumption
Goods and services are provided in order to earn income.
People in households provide the resources to enable the production of goods and services.
They also buy goods and services that are produced.
Economic Inputs
When you have a seller of something and a buyer of something you have a market.
Supply and demand determines the compensation paid or cost of the resource.
Source: Canadian Foundation for Economic Education (

7. Surplus
Equilibrium
Quantity
Brainpop video
Price

8. Generally, businesses are net borrowers.
Businesses borrow money to invest back into the organization in order to increase production.
Generally, businesses are net borrowers.
Households save some of their money; in turn, they earn interest for depositing their money with a financial institution.
Households can also borrow money; they will pay interest for this service.
Generally, households are net savers.
Source: Canadian Foundation for Economic Education (

9. Economic Injections—Funding used for spending or investment that promotes production in Canada.
Economic Leakages—money that does not promote production in Canada. This includes funds that flow into:
*savings
*taxes
*import purchases
Note: Leakages can turn into injections in many cases. VS
Injections > Leakages = Increased Production Levels
Leakages > Injections= Decreased Production Levels

10. The government may also need to borrow money
The government may also need to borrow money. They do this by selling bonds and treasury bills.
Governments often spend more money than they receive. When this happens, they run a deficit. A surplus occurs when the government takes in more revenue than it spends.
Funds flow to the government as taxes. In return, the government provides public goods and services.
International Trade
Our business sector exports to foreign markets; we import goods from foreign markets.
Source: Canadian Foundation for Economic Education (

11. What roles does government play in our economy?
With the taxes we pay, our government…
Provides public goods and services (roads, schools, hospitals)
Establishes regulations to protect workers and consumers
Provides grants, loans and subsidies to businesses and households (EI, CPP, etc.)
Restricts the production of certain things (i.e. illegal drugs, safety restrictions)
Employs people to produce the goods and services governments provide
Source: Canadian Foundation for Economic Education (

12. Economic Systems

13. Our economy is constantly changing… it is “dynamic”
Growth
Re-investment from profits
Private investment
Grants or loans from government
Contraction

14. What is the typical economic life-cycle?
Expansion
-unemployment is low
-businesses grow
-stock market often booms
-wages, prices and interest rates usually rise
-majority of people have a sense of economic well-being
Contraction
-consumers begin to spend less
-businesses cut back on production
-businesses may have to lay off workers
-consumer spending drops even more
Recession (2 quarters)/Depression
-lots of workers are laid off
-unemployment is high
-majority of people are not comfortable with their economic well-being

15. What are some advantages & disadvantages of globalization?

16. TO DO Assignment 1 (Canadian Economy) EMAIL and attach
Notes (Economic flowchart; life cycle) PPT is in O Drive
Economics Scavenger Hunt Hand-in when done
Economics Quiz (O Drive) Save to your H Drive when done