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Grade 10 Personal Finance (20S)

A Course for Independent Study

Field Validation Version

G r a d e 1 0 P e r s o n a l F i n a n c e ( 2 0 S )

A Course for Independent Study

Field Validation Version

2020Manitoba Education

Manitoba Education Cataloguing in Publication Data

Grade 10 personal finance (20S) : a course for independent study—Field validation version

Includes bibliographical references. This resource is available in print and electronic formats. ISBN: 978-0-7711-6411-8 (print) ISBN: 978-0-7711-6412-5 (pdf)

1. Personal Finance—Study and teaching (Secondary). 2. Personal Finance—Study and teaching (Secondary)—Manitoba. 3. Personal Finance—Programmed instruction. 4. Distance education—Manitoba. 4. Correspondence schools and courses—Manitoba. I. Manitoba. Manitoba Education. 657

Copyright © 2020, the Government of Manitoba, represented by the Minister of Education.

Manitoba Education Winnipeg, Manitoba, Canada

Every effort has been made to acknowledge original sources and to comply with copyright law. If cases are identified where this has not been done, please notify Manitoba Education. Errors or omissions will be corrected in a future edition. Sincere thanks to the authors, artists, and publishers who allowed their original material to be used.

All images found in this resource are copyright protected and should not be extracted, accessed, or reproduced for any purpose other than for their intended educational use in this resource.

Any websites referenced in this resource are subject to change without notice.

Available in alternate formats upon request.

C o n t e n t s iii

C o n t e n t s

Acknowledgements vii

Introduction 1Overview 3What Kind of Course Is Personal Finance? 3What Are the Other ACE Courses? 4What Will You Learn in This Course? 5How Is This Course Organized? 5What Resources Will You Need for This Course? 6Who Can Help You with This Course? 8How Will You Know How Well You Are Learning? 9How Much Time Will You Need to Complete This Course? 12When and How Will You Submit Completed Assignments? 14How Will You Learn about Changes to Policies and Procedures? 15What Are the Guide Graphics For? 16Module Cover Sheets 17

Module 1: Personal Finance and You 1Introduction 3Lesson 1: Personal Finance and You 7Lesson 2: What Affects the Financial Decisions You Make? 15Lesson 3: Making a Financial Decision 23Assignment 1.1 31Module 1 Summary 37Module 1 Learning Activity Answer Key 1

G r a d e 1 0 P e r s o n a l F i n a n c eiv

Module 2: The Bigger Picture—How the Economy Affects Your Financial Decisions 1

Introduction 3Lesson 1: What Is an Economy? 5Lesson 2: The Canadian Economic System—Putting the Puzzle Pieces Together 15Lesson 3: The Economy and You 31Assignment 2.1 43Module 2 Summary 51Module 2 Learning Activity Answer Key 1

Module 3: Banking Basics—A Closer Look at Financial Institutions 1Introduction 3Lesson 1: Financial Institutions—They Are Not All the Same 5Lesson 2: Banking Basics 15Lesson 3: Using Your Bank Account 33Assignment 3.1 45Module 3 Summary 55Module 3 Learning Activity Answer Key 1

Module 4: The Flow of Money 1Introduction 3Lesson 1: Earning Money 5Lesson 2: Tax Time 25Lesson 3: Budget Basics 55Assignment 4.1 73Lesson 4: How to Study for the Midterm Examination 95Module 4 Summary 97Module 4 Learning Activity Answer Key 1

C o n t e n t s v

Module 5: Personal Finance in Action—Purchase Decisions 1Introduction 3Lesson 1: Consumer Awareness 5Lesson 2: How Much Will You Pay? 23Lesson 3: Major Purchases 39Assignment 5.1 51Module 5 Summary 59Module 5 Learning Activity Answer Key 1

Module 6: Building Your Wealth—Saving and Investing Strategies 1Introduction 3Lesson 1: Saving and Investing 5Lesson 2: This Is All Very “Interest-ing” 27Lesson 3: Your Saving and Investing Philosophy 39Assignment 6.1 47Module 6 Summary 57Module 6 Learning Activity Answer Key 1

Module 7: Managing Credit and Debt 1Introduction 3Lesson 1: The Credit Conundrum 5Lesson 2: Using Credit to Make Larger Purchases 23Lesson 3: Managing Credit and Debt 43Assignment 7.1 51Module 7 Summary 63Module 7 Learning Activity Answer Key 1

G r a d e 1 0 P e r s o n a l F i n a n c evi

Module 8: Protecting Your Personal Finances 1Introduction 3Lesson 1: Insurance 5Lesson 2: Protecting Yourself from Financial Fraud 15Assignment 8.1 25Lesson 3: How to Study for the Final Examination 31Module 8 Summary 33Module 8 Learning Activity Answer Key 1

Bibliography 1

A c k n o w l e d g e m e n t s vii

A c k n o w l e d g e m e n t s

Manitoba Education gratefully acknowledges the contributions of the following individuals in the development of Grade 10 Personal Finance: A Course for Independent Study, Field Validation Version.

Writer Angela Baraniuk Dakota CollegiateLouis Riel School Division

Development Committee Members

Susana Hawryshko Garden Valley CollegiateGaden Valley School Division

Jessica Lister West Kildonan CollegiateSeven Oaks School Division

Esther Penner Steinbach Regional Secondary SchoolHanover School Division

Manitoba Education Staff

Louise BoissonneaultCoordinator

Document Production Services UnitInstruction, Curriculum and Assessment Branch

John FinchCoordinator

Learning Support and Technology UnitInstruction, Curriculum and Assessment Branch

Karmen GillConsultant


Lynn HarrisonDesktop Publisher


Myrna KlassenActing Coordinator

Distance Learning UnitInstruction, Curriculum and Assessment Branch

Jackie KnightProject Leader


Gilles LandryProject Manager


Marjorie PoorPublications Editor


Dale ReadyConsultant

Distance Learning UnitInstruction, Curriculum and Assessment Branch


Introduction

I n t r o d u c t i o n 3

I n t r o d u c t i o n

Overview

Welcome to Grade 10 Personal Finance.

This independent study course is intended to provide financial skills and knowledge and to help you feel more confident when it comes to managing personal finances. Unlike some of the other courses that you might be taking in high school, Grade 10 Personal Finance is a very practical one for high school students and even adults. As you are probably aware, many families are struggling financially. Their debt is out of control. They are unable to pay their bills, and their finances continue to deteriorate. Often, this is because they lack financial literacy. Financial literacy is defined as “having the skills, knowledge, and confidence to make sound financial decisions” (Manitoba Finance).

As a student enrolled in an independent study course, you have taken on a dual role—that of a student and a teacher. As a student, you are responsible for mastering the lessons and completing the learning activities/process work and assignments. As a teacher, you are responsible for checking your work carefully, noting areas in which you need to improve, and motivating yourself to succeed.

What Kind of Course Is Personal Finance?

Before diving into this course, it will help to understand what type of course it is. When you take a class like Science 20S, you know it is a science course. How about Grade 10 Personal Finance (20S)? Where does it belong? What type of course is it?

Grade 10 Personal Finance is part of the applied commerce education (ACE) cluster of courses. ACE consists of 14 optional courses for high school students interested in pursuing a career in a commerce-related field such as economics, entrepreneurship, business, marketing, technology, and finance.

Each course within ACE is an excellent option for anyone wanting to understand more about their role in the global economy. These courses are extremely valuable in helping you develop the skills you will need to be an effective leader, innovator, citizen, consumer, and employee.

G r a d e 1 0 P e r s o n a l F i n a n c e4

ACE courses, especially Grade 10 Personal Finance, help students in other areas of their personal and academic life too. Students in a variety of Manitoba schools have mentioned how ACE courses helped them with their roles in student council, philanthropy groups, sports teams, youth groups, and so on. They have said how ACE courses have helped them succeed in their other courses. Specifically, students who have taken Grade 10 Personal Finance have discovered that what they learned in this course helped them in other courses such as ones in the visual arts and English language arts.

What Are the Other ACE Courses?

Thirteen of the 14 ACE courses are categorized into four strands:Q Finance strand focuses on personal finances, accounting, and economicsQ Entrepreneurship strand focuses on entrepreneurship, and the development

and management of businessQ Commerce strand focuses on promotions, retailing, marketing, and

e-commerceQ Technologies, Topics, and Trends strand focuses on business

communications, technology, topics, and trends

The 14th course is a stand-alone course, Grade 9 Business Innovations (10S). This course offers students the opportunity to explore commerce-related topics, such as economics, entrepreneurship, business, marketing, technology, and finance. The Grade 9 stand-alone course is a suggested introduction to the courses offered in each of the four strands.

Here is a list of all the courses within each of the strands.

Applied Commerce Education

All Strands: Grade 9 Business Innovations 10S

Finance Strand

EntrepreneurshipStrand

CommerceStrand

Technologies, Topics and Trends Strand

Personal Finance 20S Entrepreneurship 20S Creative Promotions 20S

Business Communications 30S

Accounting Essentials 30S

Venture Development 30S

Retailing Perspectives 30S

Applied Business Technologies 40S

Accounting Systems 40S

Business Management 40S

Marketing and Digital Commerce 40S

Topics and Trends in Business 40S

Economic Principles 40S


You can find more information on these courses here: www.edu.gov.mb.ca/k12/cur/teched/ace_framework/index.html. If you are interested in taking some of them, then you might be able to do so through the Independent Study Option or your high school (if you are attending school).

As you can see, Grade 10 Personal Finance is part of the Finance Strand, which focuses on personal finance, accounting, and economics. So, what is personal finance?

What Will You Learn in This Course?

This course is about financial literacy. You will learn about making a budget, saving and investing money, and how financial institutions like credit unions and banks can help you reach your financial goals. This course will help you as you buy a vehicle, rent an apartment, travel, and save to go to college or university.

How Is This Course Organized?

The Grade 10 Personal Finance course consists of the following eight modules:Q Module 1: Personal Finance and YouQ Module 2: The Bigger Picture—How the Economy Affects Your

Financial DecisionsQ Module 3: Banking Basics—A Closer Look at Financial InstitutionsQ Module 4: The Flow of MoneyQ Module 5: Personal Finance in Action—Purchase DecisionsQ Module 6: Building Your Wealth—Saving and Investing StrategiesQ Module 7: Managing Credit and DebtQ Module 8: Protecting Your Personal Finances

Each module in this course consists of several lessons, which contain the following components:Q Lesson Focus: The Lesson Focus at the beginning of each lesson identifies

the knowledge and skills you should have achieved by the end of the lesson.Q Introduction: Each lesson begins with an explanation of what you will be

learning in that lesson.Q Lesson: The main body of the lesson is made up of the content that you need

to learn. It contains text, explanations, images, diagrams, tables, completed examples of calculations, and so on.

http://www.edu.gov.mb.ca/k12/cur/teched/ace_framework/index.html

http://www.edu.gov.mb.ca/k12/cur/teched/ace_framework/index.html


Q Learning Activities: Each lesson includes a learning activity that will help you learn about the lesson topics and prepare you for the assignments, the midterm examination, and the final examination. Once you complete a learning activity, check your responses against those provided in the Learning Activity Answer Key found at the end of the applicable module. You will not submit the completed learning activities to the Distance Learning Unit.

Q Assignments: An assignment is given at the end of each module. You will mail or electronically submit all your completed assignments to the Distance Learning Unit for assessment at the end of each module. In total, all assignments are worth 60 percent of your final course mark.

Q Summary: Each lesson ends with a brief review of what you just learned

Lesson 4 in Module 4 and Lesson 3 in Module 8 are review lessons. They will help you to assess your progress in this course and to prepare for either the midterm examination or the final examination.

This course also includes a Bibliography section.

What Resources Will You Need for This Course?

You do not need a textbook for this course. All the content is provided directly within the course. You will, however, need access to a variety of resources.

You will require access to an email account if you plan to Q communicate with your tutor/marker by emailQ use the learning management system (LMS) to electronically submit your

completed assignments

The required and optional resources for this course are identified below.

Required Resources

For this course, you will need access a calculator. Use a calculator as you work through this course. You will also need the calculator for the examinations. If you do not have access to one, contact your tutor/marker.


Optional Resources

It would be helpful if you had access to the following resources:Q Photocopier/scanner: With access to a photocopier/scanner, you could make

a copy of your assignments before submitting them so that if your tutor/marker wants to discuss an assignment with you over the phone, each of you will have a copy. It would also allow you to continue studying or to complete further lessons while your original work is with the tutor/marker. Photocopying or scanning your assignments will also ensure that you keep a copy in case the originals are lost.

Q Resource people: Access to local resource people, such as teachers, school counsellors, and librarians, would help you complete the course.

Q A computer with word processing and spreadsheet software: Access to word processing software (e.g., Microsoft Word) and spreadsheet software (e.g., Microsoft Excel) would help you complete some assignments.

Q A computer with Internet access: Some lessons suggest website links as sources of information or for supplementary reference and reading. If you do not have Internet access, you will still be able to complete the course, but you will need to find different ways of accessing information.

Internet SafetyIf you choose to use the Internet to do research, be safe. The Internet is a valuable source of information and should be used responsibly. Talk to your parents/guardians about Internet safety, and use the following guidelines when going online:

Q Choose a user name that does not tell your name, gender, age, or other personal details.

Q Never give anyone private information.Q Do not answer emails from strangers.Q If someone asks you to keep your relationship with them a secret, stop talking

to the person and immediately tell your parent/guardian.Q Do not email or post pictures or files.

The above is not a complete list because no list can possibly cover all dangerous situations. Use your common sense and be careful.


Who Can Help You with This Course?

Taking an independent study course is different from taking a course in a classroom. Instead of relying on the teacher to tell you to complete a learning activity or an assignment, you must tell yourself to be responsible for your learning and for meeting deadlines. There are, however, two people who can help you be successful in this course: your tutor/marker and your learning partner.

Your Tutor/Marker

Tutor/markers are experienced educators who tutor Independent Study Option (ISO) students and mark assignments and examinations. When you are having difficulty with something in this course, contact your tutor/marker, who is there to help you. Your tutor/marker’s name and contact information were sent to you with this course. You can also obtain this information in the learning management system (LMS).

Your Learning Partner

A learning partner is someone you choose who will help you learn. It may be someone who knows something about personal finance, but it doesn’t have to be. A learning partner could be someone else who is taking this course, a teacher, a parent or guardian, a sibling, a friend, or anybody else who can help you. Most importantly, a learning partner should be someone with whom you feel comfortable and who will support you as you work through this course.

Your learning partner can help you keep on schedule with your coursework, read the course with you, check your work, look at and respond to your learning activities, or help you make sense of assignments. You may even study for your examinations with your learning partner. If you and your learning partner are taking the same course, however, your assignment work should not be identical.


PlagiarismPlagiarism IS a big deal with serious consequences, so it’s important that you understand what it is and how to avoid it.

What is plagiarism? In brief, plagiarism is taking someone’s ideas or words and presenting them as if they are your own.

How can you avoid plagiarism?Q Begin early. Research takes time. Allow enough time to search for, evaluate,

and read sources, and to get help if you need it. Always document your sources immediately.

Q Present your research by quoting and paraphrasing. Q When you use a quote, you use the exact same words with quotation marks,

and you indicate exactly where it came from. Q When you paraphrase, you rewrite an author’s idea using your own words and

you do not use quotation marks (but you also make sure to state clearly whose idea it is).

Q Learn how to use different citation styles. Q Give credit where credit is due. Never pretend someone else’s idea is your own.

This course is different from the usual independent study course, so in addition to your tutor/marker and your learning partner, ask your parents or guardians, or other adults, if they feel comfortable helping you with this course. (Many people view finances as a very personal subject, and hesitate to talk about it, especially if they are struggling financially.) Most adults have a lot of experience with their own personal finances. They have likely earned money, paid bills, rented and bought homes and vehicles, borrowed and invested money, and so on. You can learn from their practical experience. And, what you learn in this course might even help your family members with their finances.

How Will You Know How Well You Are Learning?

You will know how well you are learning in this course by how well you complete the learning activities, assignments, and examinations.

Learning Activities

The learning activities in this course will help you to review and practise what you have learned in the lessons. You will not submit the completed learning activities to the Distance Learning Unit. Instead, you will complete the learning activities and compare your responses to those provided in the Learning Activity Answer Key found at the end of each module.


Make sure you complete the learning activities. Doing so will not only help you to practise what you have learned, but will also prepare you to complete your assignments and the examinations successfully. Many of the questions on the examinations will be similar to the questions in the learning activities. Remember that you will not submit learning activities to the Distance Learning Unit.

Assignments

Each module in this course contains an assignment, which you will complete and submit to the Distance Learning Unit for assessment. The assignments are worth a total of 60 percent of your final course mark.

The tutor/marker will mark your assignments and return them to you. Remember to keep all marked assignments until you have finished the course so that you can use them to study for your examinations.

Midterm and Final Examinations

This course contains a midterm examination and a final examination.Q The midterm examination is based on Modules 1 to 4, and is worth

20 percent of your final mark in this course. You will write the midterm examination when you have completed Module 4.

Q The final examination is based on Modules 5 to 8, and is worth 20 percent of your final mark in this course. You will write the final examination when you have completed Module 8.

The two examinations are worth a total of 40 percent of your final course mark. You will write both examinations under supervision.

To do well on each examination, you should review all the work you have completed from the modules, including all learning activities and assignments.


Requesting Your ExaminationsYou are responsible for making arrangements to have the examinations sent to your proctor from the Distance Learning Unit. Please make arrangements before you finish Module 4 to write the midterm examination. Likewise, you should begin arranging for your final examination before you finish Module 8.

To write your examinations, you need to make the following arrangements:Q If you are attending school, your examination will be sent to your school

as soon as all the applicable assignments have been submitted. You should make arrangements with your school’s Independent Study Option (ISO) school facilitator to determine a date, time, and location to write the examination.

Q If you are not attending school, check the Examination Request Form for options available to you. Examination Request Forms can be found on the Distance Learning Unit’s website, or look for information in the learning management system (LMS). Two weeks before you are ready to write the examination, fill in the Examination Request Form and mail, fax, or email it to

Distance Learning Unit 500–555 Main Street P.O. Box 2020 Winkler MB R6W 4B8 Fax: 204-325-1719 Toll-Free Telephone: 1-800-465-9915 Email: [email protected]


How Much Time Will You Need to Complete This Course?

Learning through independent study has several advantages over learning in the classroom. You are in charge of how you learn and you can choose how quickly you will complete the course. You can complete as many lessons as you wish in a single session. You do not have to wait for your teacher or classmates.

From the date of your registration, you have a maximum of 12 months to complete this course, but the pace at which you proceed is up to you. Read the following charts for suggestions on how to pace yourself.

Chart A: Semester 1

If you want to start the course in September and complete it in January, you can follow the timeline suggested below.

Module Completion DateModules 1 and 2 End of September

Modules 3 and 4 Middle of November

Midterm Examination End of November

Modules 5 and 6 End of December

Modules 7 and 8 Middle of January

Final Examination End of January

Chart B: Semester 2

If you want to start the course in February and compete it in May, you can follow the timeline suggested below.

Module Completion DateModules 1 and 2 End of February

Modules 3 and 4 End of March

Midterm Examination Middle of April

Modules 5 and 6 End of April

Modules 7 and 8 Beginning of May

Final Examination Middle of May


Chart C: Full School Year (Not Semestered)

If you want to start the course in September and compete it in May, you can follow the timeline suggested below.

Module Completion DateModules 1 and 2 End of September

Modules 3 and 4 End of November

Midterm Examination End of January

Modules 5 and 6 Middle of March

Modules 7 and 8 Middle of April

Final Examination Middle of May

Timelines

Do not wait until the last minute to complete your work, since your tutor/marker may not be available to mark it immediately. It may take a few weeks for your tutor/marker to assess your work and return it to you.

If you need this course to graduate this school year, all coursework must be received by the Distance Learning Unit on or before the first Friday in May, and all examinations must be received by the Distance Learning Unit on or before the last Friday in May. Any coursework or examinations received after these deadlines may not be processed in time for a June graduation. Assignments or examinations submitted after these recommended deadlines will be processed and marked as they are received.


When and How Will You Submit Completed Assignments?

When to Submit Assignments

While working on this course, you will submit completed assignments to the Distance Learning Unit eight times. The following chart shows you exactly what assignments you will be submitting at the end of each module.

Submission of Assignments

Submission Assignments You Will Submit

1 Module 1: Personal Finance and YouModule 1 Cover Sheet Assignment 1.1

2 Module 2: The Bigger Picture—How the Economy Affects Your Financial DecisionsModule 2 Cover SheetAssignment 2.1

3 Module 3: Banking Basics—A Closer Look at Financial InstitutionsModule 3 Cover SheetAssignment 3.1

4 Module 4: The Flow of MoneyModule 4 Cover SheetAssignment 4.1

5 Module 5: Personal Finance in Action—Purchase DecisionsModule 5 Cover SheetAssignment 5.1

6 Module 6: Building Your Wealth—Saving and Investing StrategiesModule 6 Cover SheetAssignment 6.1

7 Module 7: Managing Credit and DebtModule 7 Cover SheetAssignment 7.1

8 Module 8: Protecting Your Personal FinancesModule 8 Cover SheetAssignment 8.1

How to Submit Assignments

In this course, you have the choice of submitting your assignments either by mail or electronically. Q Mail: Each time you mail something, you must include the print version of

the applicable Cover Sheet (found at the end of this Introduction). Complete the information at the top of each Cover Sheet before submitting it along with your assignments.

Q Electronic submission: You do not need to include a cover sheet when submitting assignments electronically.


Submitting Your Assignments by Mail If you choose to mail your completed assignments, please photocopy all the

materials first so that you will have a copy of your work in case your package goes missing. You will need to place the applicable module Cover Sheet and assignment(s) in an envelope, and address it to Distance Learning Unit 500–555 Main Street P.O. Box 2020 Winkler MB R6W 4B8Your tutor/marker will mark your work and return it to you by mail.

Submitting Your Assignments ElectronicallySpecific instructions on how to submit assignments were sent to you with this course. In addition, this information is available in the learning management system (LMS).

If you are submitting assignments electronically, make sure you have saved copies of them before you send them. That way, you can refer to your assignments when you discuss them with your tutor/marker. Also, if the original hand-in assignments are lost, you are able to resubmit them.

Your tutor/marker will mark your work and return it to you electronically.

The Distance Learning Unit does not provide technical support for hardware-related issues. If troubleshooting is required, consult a professional computer technician.

How Will You Learn about Changes to Policies and Procedures?

The Distance Learning Unit strives to ensure that materials are current. Nevertheless, in light of continually evolving technology, some policies and procedures related to requesting and writing examinations, contacting your tutor/marker, submitting assignments, registering for courses, dealing with course expiration, and paying for courses may have changed since this course was produced. Please refer to the learning management system (LMS) for the most current policies and procedures.


What Are the Guide Graphics For?

Guide graphics are used throughout this course to identify and guide you in specific tasks. Each graphic has a specific purpose, as described below.

Assignment: Complete an assignment. You will submit your completed assignment to the Distance Learning Unit for assessment at the end of each module.

Check Your Work: Check your responses against those provided in the Learning Activity Answer Key found at the end of the applicable module.

Examination: Write your midterm or final examination at this time.

Internet: Use the Internet, if you have access to it, to obtain more information. Internet access is optional for this course.

Key Word: Note that a new important term is being explained.

Lesson Focus: This list states what you will be learning in this lesson.

Learning Activity: Complete a learning activity. This will help you to review or practise what you have learned and to prepare for an assignment or an examination. You will not submit learning activities to the Distance Learning Unit. Instead, you will compare your responses to the Learning Activity Answer Keys found at the end of the applicable module.

Learning Partner: Ask your learning partner to help you with this task.

Lesson Introduction: The introduction sets the stage for the lesson. It may draw upon prior knowledge or briefly describe the organization of the lesson.

Mail or Electronic Submission: Mail or electronically submit your completed assignment(s) to the Distance Learning Unit for assessment at this time.

Note: Take note of and remember this important information or reminder.

Contact Your Tutor/Marker: Telephone or email your tutor/marker.

Remember: If you have questions or need help at any point during this course, contact your tutor/marker or ask your learning partner for help.

Good luck with the course!


Module 2 The Bigger Picture —How the Economy Affects Your Financial Decisions

M o d u l e 2 : T h e B i g g e r P i c t u r e 3

M o d u l e 2 : Th e B i g g e r P i c t u r e — H o w t h e E c o n o m y

A f f e c t s Yo u r F i n a n c i a l D e c i s i o n s

Introduction

In Module 1, you learned about the five main activities associated with personal finance. You also learned how you could employ a decision-making process to make financial decisions that align with the goals you want to achieve. In this module, you are going to take a step back and look at the big picture to see how the Canadian economy can have an impact on the financial decisions that you make.

There are three lessons in this module. There will be one learning activity at the end of each lesson and one assignment at the end of the module. The learning activities will help you prepare for the assignment. If you are having trouble with a concept, you can review the course notes again, take another look at your learning activities, and seek help from a learning partner or your tutor/marker.

Assignment in Module 2

When you have completed the assignment for Module 2, submit it to the Distance Learning Unit either by mail or electronically through the learning management system (LMS). The staff will forward your work to your tutor/marker.

Lesson Assignment Marks

3 Assignment 2.1 50


Notes


L e s s o n 1 : W h a t I s a n E c o n o m y ?

Lesson Focus

By the end of this lesson, you should be able toq define economyq explain how an economy can have an impact on your financial

decisionsq compare different types of economic systems

Introduction

In this lesson, you will learn what an economy is and how this can affect the financial decisions that you make. You will also compare three different economic systems to learn more about how the Canadian economy is structured and what this means for you and your personal finances.

What Is an Economy?

The term economy refers to the wealth and resources of a country or region. How well an economy is doing is generally measured in terms of the production and consumption (use) of goods and services. Everyone is a participant in the economic system in some way, including you. Every time you purchase goods or services, you are participating in the economy as a consumer. Perhaps you or someone in your household is involved in the production of goods and services as well by working at or running a business.


DID YOU KNOW?One way to measure an economy’s growth is by calculating its GDP. GDP stands for gross domestic product and measures the total value of economic activity within a country. For example, in 2016, Canada’s GDP was 1.53 trillion dollars.

The formula used to calculate GDP is

GDP = C + I + G + (X – M)

C = Consumer SpendingI = Investments (Business)G = Government SpendingX = ExportsM = Imports

This figure can be compared from year to year (or month to month) to show whether the economy is growing or not.

Economics is sometimes called the “science of decision making” because a society will need to make decisions on what to do with the limited resources that they have. Resources could include things such as money, land, natural resources (fossil fuels, minerals, vegetation, water, animals, etc.), human resources, and even ideas. Every economic model must answer the following three fundamental questions:

Q What will be produced? Examples:

Q Should a government use funds to build a new library or fix the roads?Q Should a company invest in new technology to develop a product for

the future or increase production of its existing product?Q Should a farmer plant more wheat or soy beans?

Q How will it be produced? Examples:

Q How should we regulate the pollution or waste that businesses might make when producing goods?

Q Should we be protecting any natural resources or land from production?

Q What other regulations need to be put in place for businesses involved in production?


Q Who will consume what is produced? Examples:

Q How will a business market their product to consumers?Q How do we decide which community will benefit from a new school or

community centre?Q Is there a market for a product in another country (exports)?

These decisions are made by many different sectors of the economic system including producers, government, and consumers like you. You will learn more about the various sectors of our economic system and how they interact with each other in Lesson 2.

Canada is a vast and diverse country and each province has its own economic opportunities and challenges. General statements about the Canadian economy as a whole can be useful, but sometimes it makes more sense to consider a provincial economy or even a local economy (city or region) when making certain financial decisions.

Think AboutWhat is the province of Manitoba known for when it comes to production?

What is the local city or region where you live known for when it comes to production?

In what ways do you participate in your local economy?

You will look at the Canadian economy as a whole later. For now, just focus on the province of Manitoba. Manitoba’s economy runs on the following key industry sectors (Manitoba Economic Development and Training):Q advanced manufacturing Q aerospace Q agribusiness Q creative industries Q education Q energy and environment Q financial services Q information and communication technologies Q life sciences and biotechnology Q mining and minerals Q tourism Q transportation and distribution


As you can see, the list is long and that is because Manitoba is known for having a very diverse economy. This means Manitoba’s economy is not based on just one industry but rather on a variety of industry sectors. This diversity can be seen as an advantage because if one specific industry is in trouble, the whole province will not be hit as hard all at the same time.

What Happens When an Industry Suffers in a Specific Region?

In many regions around the province, one particular industry is dominant, and when that industry suffers, it can have detrimental effects on the area. For example, in the spring of 2017, the rail line to Churchill was damaged by flood waters. Churchill’s primary industry is tourism—people come from all over the world to watch birds, polar bears, beluga whales, and of course, the famous aurora borealis. Because the main line of transportation to Churchill was down, tourism was down as well. Churchill’s economy suffered because there were fewer tourists coming in and spending money (consuming). Many workers in Churchill had to be laid off, at least partly because there was not enough work or money coming in without the tourists there. Some businesses closed and many people had to move away to find work.

This scenario has been played out in many regions in Manitoba (and in Canada) where a dominant industry or employer like a mine, a pulp and paper mill, or a car manufacturing plant shuts down and workers get laid off. Not only does this affect the individual who is laid off, but it also has a trickle-down effect. When many individuals are suddenly out of work in a region, they do not have money to spend on other goods and services, such as local restaurants, hairdressers, accountants, and physiotherapists. The most successful regions are those that can quickly resolve the problem affecting their local economy or develop new industry sectors that have better growth potential.

Think AboutWhat are some other examples of regions that have been affected (either positively or negatively) by the dominance of one particular industry?


How Does Your Local Economy Affect Your Financial Decisions?

To see how your local economy affects your financial decisions, go back and take a look at the five primary functions of personal finance: earning, saving, investing, spending, and giving. The most obvious connection is the earning function; if the economy is not doing well, there may not be enough jobs available to earn money. All the other four functions of personal finance are closely related to earning; without money you certainly cannot save, invest, spend, or give. You may need to think carefully about the outlook of the industry or sector you plan to go into before you decide to pursue a certain type of job or occupation. Many people in our country must relocate to different regions or provinces to find work and earn money.

On the other hand, if a local economy is flourishing, there is generally plenty of work available. When Alberta’s oil industry really started taking off in the 1970s, the province’s population increased by a third (this equated to approximately 4000 people a month moving to the province to work). In addition to people working in the oil industry, this included people working in the businesses needed to support growing communities, such as restaurants, repair shops, accountants, hair salons, financial institutions, and other retail stores. When people are earning money, they have more money to spend, and these businesses benefit from that as well. In the mid-1980s, the world price of oil decreased, and Alberta’s economy took a downturn. Many people lost their jobs and had to relocate again to find work. In the 1990s, things picked up again because oil prices increased, but then in 2014, the price of oil dropped dramatically again, and the province is still recovering. (CBC) As you can see, the growth of an economy is cyclical, with its ups and downs. You will learn more about the economic lifecycle in Lesson 3.

Think AboutHow will you earn money now and in the future?

If you plan to stay in your local area, what is the outlook for jobs in the occupation area you plan to pursue? Will you potentially need to relocate to another town, city, or province in order to earn money?


The Canadian Economy

As mentioned earlier, Canada is a vast country and the economic situations of various regions and provinces differ considerably. In 2017, Canada was considered the 12th largest economy in the world. We exported $377 billion of goods, with our top exports including crude petroleum, cars, refined petroleum, vehicle parts, and petroleum gas. We imported $326 billion of goods, with our top imports including cars, delivery trucks, refined petroleum, crude petroleum, and computers. Our major trading partners are the United States, China, United Kingdom, Japan, Mexico, and Germany. (Observatory of Economic Complexity).

In late 2018, trade representatives from Canada, USA, and Mexico came to an agreement on a new trade deal called the USMCA (United States-Mexico-Canada Agreement) to replace the NAFTA (North American Free Trade Agreement) that was previously in effect. At the time of writing this course, this new trade agreement still has to be ratified (approved) by each country’s legislative bodies. Only time will tell how various industries in Canada will be affected by this new trade deal.

As you can see, Canada’s economic system does not operate in a bubble—it is reliant on other countries and is part of a global economy. You will learn more about how governments play a role in the economic system in Lesson 2.

Not All Economic Systems Are the Same

An economic system is a system designed to deal with the production, distribution, and consumption of goods and services by a society. It is important to note that there are different types of economic systems around the world, and they can affect the financial decisions of the citizens within that country in many ways. The following chart illustrates the key differences.

Look at the following chart as a spectrum with extreme opposites. Most economies do not fit perfectly in any one column. The Canadian economy lies somewhere between capitalism (market economy) and socialism (mixed economy).


Capitalism(a.k.a. Market

Economy)

Socialism (a.k.a. Mixed

Economy)

Communism(a.k.a. Command

Economy)Influences Q influenced by Adam Smith’s

Wealth of Nations, 1776Q influenced by Karl Marx and

Friedrich Engel’s Communist Manifesto, 1848 (which analyzed class struggles and the problems with pure capitalism)

Q Influenced by Karl Marx and Friedrich Engel’s Communist Manifesto, 1848

Characteristics Q emphasizes private ownership of property

Q businesses motivated by profit

Q belief that if all people work for the good of themselves this will be good for everyone

Q belief that the government should interfere as little as possible in business resulting in a “free market” system

Q based on the idea that competition is good—it increases productivity and efficiency, and ultimately, consumers get better goods and services

Q based on the belief that all people are working for the good of society

Q based on the idea that the government should help to distribute the wealth and that there should be no poverty (this is controlled by the people through the government)

Q believes in a socialism that abolishes private ownership and seeks to create a “classless society” where everyone is equal

Q based on the belief that the wealth of a nation should be shared equally among all people

Q no competition; the purpose of business is to provide goods and services, not to make a profit

Potential Benefits

Q Individuals own their own property.

Q Individuals keep their own money; whatever they work for is theirs (fewer taxes).

Q Anyone can be a business owner or entrepreneur if they want to be.

Q Under the “free market” system, businesses can succeed and fail (consumers may benefit from this competition).

Q The government provides essential services (examples: health care, social assistance).

Q The market is still a “free market” and you can start your own business (success may depend on how smart/hard you work).

Q This system incorporates the benefits of capitalism and communism.

Q Everyone is considered equal (classless society).

Q The government provides all of the services (centralized government).

Q Everyone is supposed to work hard together for the greater good (communal).

continued


Capitalism(a.k.a. Market

Economy)

Socialism (a.k.a. Mixed

Economy)

Communism(a.k.a. Command

Economy)Potential Drawbacks

Q There can be a lot of wealthy people and a lot of poor people (creates classes within society).

Q The government may not provide as many services.

Q Corporations have a lot of power.

Q Businesses may be more motivated by profit than the sustainability of people in the communities in which they operate and of the planet.

Q Capitalism is often associated with social inequities (poverty, greed) due to the individual pursuit of power.

Q There will be higher taxes because the government needs to collect more money to provide all of the government services.

Q The government has more control over the lives of citizens and there may be some interference in the marketplace due to regulations/laws.

Q There is still an upper class of very wealthy individuals (class society).

Q Consumers have very little choice in the marketplace.

Q Individuals cannot own their own property or start any business they want without government approval.

Q The ideal of communism is rarely achieved because of human nature (greed, jealousy, corruption).

Q Personal freedom/choice is limited.

Q Political communism often results in authoritarian style governments.

You might have noticed that Canada is placed on the spectrum between the capitalism and socialism columns because it is somewhere in between the two. Canada has a mixed economy. On one hand, our economic system demonstrates some very capitalistic ideals including the fact that individuals can own their own property and businesses are motivated by profit. On the other hand, our government demonstrates some socialist ideals because it plays a role in helping to redistribute the wealth and provides social services such as health care and employment insurance. Consider the economic system chart above more like a spectrum rather than strict categories. You will explore the Canadian economic system in more detail in Lesson 2.

The Original Economic Model

The traditional economy is one of the oldest economic systems that preceded (came before) any of the existing models mentioned earlier. It is a system based on tradition and custom and is usually centred around a family, community, or ethnic group. Communities all around the world practised the traditional economic model by making use of the natural resources in the area. They typically bartered or traded goods and services rather than exchanging money. Things have evolved over time; due to advancements in technology and globalization, there are very few pure traditional economies left around the world.


DID YOU KNOW?Historically, some Indigenous economic systems were organized around activities such as fishing, hunting, and gathering, and were subject to the natural resources available in the region where the community was located. This is an example of a traditional economic model. Economic choices were based on the environment and the needs of the participants, with trade occurring between communities from different regions. Many Indigenous communities still use the traditional economic model today to varying degrees.

Think AboutHow does the traditional economic model differ from the other economic models discussed in this lesson?

If you lived in a community that used the traditional economic model, how might life be different? What special skills or abilities would you use to contribute to your community? For example, would you be someone in charge of hunting or gathering food? Are you a leader/teacher? an artist? a musician? a builder? Or are you more of a healer or spiritual person? Keep in mind that every successful community needs different types of people with different skills and abilities to support one another.

Learning Activity 2.1

Now that you have completed the lesson, check your knowledge by completing the following learning activity. Make sure you complete and check this learning activity very carefully using the Answer Key located at the end of this module as some of the questions will be on the midterm examination.

1. What is an economy?

2. What is GDP and how is this used to measure an economy?

3. What is the basic formula used to calculate GDP?

continued


Learning Activity 2.1 (continued)

4. Explain how your local economy can affect your financial decisions.

5. What type of economic system does Canada have? In your answer, provide one potential benefit and one potential drawback to this type of economic system.

6 Many Indigenous communities use the traditional economic model to varying degrees. Thinking of the three fundamental questions of any economic model, explore how a traditional economy might work.a. What will be produced? (How might Indigenous communities decide

what is produced?)b. How will it be produced? (What might Indigenous communities

consider when using natural resources in a region?)c. Who will consume what is produced? (How might Indigenous

communities decide who will consume [use] what is produced?)

End of Lesson Checklist

q Now that you have completed Learning Activity 2.1, use the Module 2 Learning Activity Answer Key to ensure that your answers are correct. This key is located at the end of this module.

q Go back to the targeted learning statements that are listed at the beginning of this lesson. Are you able to do everything on the list? If not, you may need to review a few items.

Printed in CanadaImprimé au Canada

Released 2020

Grade 10 Personal Finance Course Preview€¦ · The 14th course is a stand-alone course, Grade 9...

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Transcript of Grade 10 Personal Finance Course Preview€¦ · The 14th course is a stand-alone course, Grade 9...