I am Maya. Did you know that businesses have a life cycle just like people do? From the moment a new idea is born to the day a giant company decides to change its entire strategy, every stage affects the people who work there.I am Noah. When businesses or the whole economy run into trouble, the Canadian government has a set of tools to help fix things. We are going to look at how taxes and spending can jumpstart a slow economy.I am Liam. We will also talk about the things no one can control, like border closures or a sudden change in the supply of things like oil or food, and how that hits your wallet.I am Chloe. By the end of this video, you will see how the big decisions made in Ottawa and the stages of local businesses determine if you have a job and what you can afford to buy. Let us start with the life of a business.The life cycle of a business has five main stages. It starts with the seed stage, which is just an idea and some research. Next is the startup stage, where the business actually opens its doors. This is the most dangerous stage, as most businesses fail here because they run out of money. If they survive, they move into the growth stage, where they hire more people and expand. Then comes maturity, where the business is stable and well known. Finally, a business enters either decline or renewal. A declining business stops being useful or popular, like a store that sells V H S tapes today. But a business can choose renewal by inventing something new. For your career planning, remember this tip: working for a growth stage company is exciting but risky, while working for a mature company is usually much more stable.Now, what happens when the whole economy hits a recession? The Canadian government steps in to respond to economic problems. One way they do this is by changing taxes. If they cut taxes, you have more money in your paycheck, which they hope you will spend to help businesses grow. They can also increase spending on services like new roads or hospitals, which creates jobs. Another tool is changing the minimum wage. When the government raises the minimum wage, it puts more money directly into the hands of workers. They also manage unemployment benefits and pensions to make sure that people who cannot work still have money to buy food and pay rent. These responses are designed to smooth out the bumps in the business cycle and keep the country moving.Sometimes, the economy is hit by things no one expected. A great example is a border closure. If the border between Canada and the United States closes, the supply of goods like car parts or fresh fruit is cut off. This is a simple case of supply and demand. If the supply goes down but everyone still wants the product, the price goes up. We also see this with commodity prices, like the price of oil. Since almost everything we buy is moved by trucks or ships that use fuel, when the price of oil goes up, the price of everything else goes up too. This is a major part of your individual finances. If gas prices double, you have much less money left over for your hobbies or savings. Being aware of these global supply issues helps you understand why your grocery bill suddenly got more expensive.All of these factors together determine the health of your financial life. When the government changes interest rates, it affects how much you pay for a student loan. When a business in your town moves from growth to maturity, it changes the types of jobs available to you. The key is to stay informed. A major pro of understanding these models is that you will not be surprised when the world changes. You will know that a tax cut means more spending money, and a border closure means you should probably wait to buy that new imported gadget. Motivation comes from being in control of your money, rather than just wondering where it all went. You have the power to navigate this system by making smart, informed choices every day.We have covered a lot today, from the business cycle to government intervention. Remember, the economy is just the sum of all the choices we make. Your role as a consumer and a future worker is very important. Read the rest of the lesson to see more examples of how different people in Canada are impacted by these changes. A student, a business owner, and a retired person all see the economy through different eyes. Understanding all these perspectives will make you a much wiser citizen and a much more successful investor. Take a look at the summary of government responses below to see which ones are currently being used in our country. We are excited to see you use this knowledge to build a great financial future. Good luck with the rest of your reading.
