http://www.canada.com/topics/news/story.html?id=20883b1d-f9b0-44b1-bc8c-f66e9c332639
Summary
The article i read is about the Finance Minister, Jim Flaherty who took action to ease the impact of the financial crisis managing countries worldwide. He recently met up with the G7 finance ministers in Washington to discuss about decrease in co-ordinate rate. Flaherty announced that the savings of Canadians are secured and he will not run a budget deficit because it will harm Canada's economy. Flaherty and the other banks, such as Bank of Canada said that they will be cutting interest rates due to the fallout of the financial crisis. Now the Bank of Canada's lending rate is cut by 50 points to 2.5%. Flaherty rejected the idea of increasing Canada's bank deposit insurance limit because it is already the highest among the world reaching $100,000. Overall, the Flaherty is satisfied with the banks of Canada because the savings are secured and will continue to ensure continual progress.
Connection
The connections between the article and the chapter on merchandise inventory are the prepaid insurance, bank and bank loan accounts. People whose income is a little under average will have difficulties paying up mortgages, however; the reduction in interest rate will make it easier. In COGS , this affects the expenses because the bank charges account will be reduced. This makes a slightly decrease in total expenses. The people who deposits or borrow money from the bank will pay up easier than before.
Reflection
I think that the financial minsters has made a great decision to help the financial crisis. This will encourage people to invest in the banks of Canada, due to the reduction in co-ordinate rate. This also helps the people in Canada manage their finances easier, such as insurances and mortgages. I think in the future the interest rate will keep decreasing until it reaches a certain amount. Then it will rise dramatically because the banks won't be able to keep this for long and their own money are depended on the interest charges. For now, I think this news will attract a lot of people to make investments in the banks of Canada.
1 comment:
Allan,
I think I'd have to agree with your reflection because your reflection is basically trying to reflect what happened in the USA. They greatly decreased the interest rates from banks but later they weren't able to sustain the great drop in interest and then had to increase it again. But because of this they are now in an economic crisis, I think, so if Canada were to do this I would think Canada could turn into the second USA and enter a economic crisis aswell
Kevin Chan
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