The New Canadian $100 Bills
The New Canadian $100 Bills
On November 14th 2011, the new hundred dollar plastic bills were released to Canadians. This is the first ever plastic bank note to be released in Canada. The goal of this innovation was to decrease the high rates of counterfeiting that were experienced between the years 2001 and 2004. During this time there were about four hundred and seventy fake notes in circulation for every million dollars. Using advances in technology and financial innovations, the government has been able to decrease this number to only about thirty fake bills for every million dollar. The new plastic bill has even more anti-counterfeiting features and is expected to last 2.5 times longer due to their high quality polymer. This will help the government save $200 million.
Counterfeiting in any country would cause problems as it will alter the value of the money. It will be hard for it to retain its value. Money is the means of payment. Currently money in Canada consists of currency and deposits at the banks or other depository institutions. There are two methods to categorize these, M1 and M2; M1 consists of currency and chequable deposits of individuals and businesses, meanwhile M2 consists of M1 plus all other deposits.
The central bank of our country is called The Bank of Canada. Unlike other commercial banks that provide banking services to the people, Bank of Canada is independently responsible for various aspects of the country such as funds management, bank notes, the monetary policy and the countrys financial system in general. There are eight different steps as to how the banking system creates money by making loans. When the banking system has excess reserves and the monetary base increases, this money creation process begins. This process will be discussed in detail in the presentation.
Money is of huge importance to every individual as it has four main functions in society; it is a medium of exchange, a unit of account, a store of value, and a standard of deferred payment. After release the new $100 bills they were considered money as they could be used for the various functions described above. However, prior to their release they were just a piece of plastic which would have no value and people would not be officially allowed to exchange it for something valuable.
Moreover, we need to consider the factors that influence the quantity of money that people will like to hold, in order to determine the impact of these new plastic