Topic 2 - Personal Economics

Question 1

Income

Answer 1

Cash coming in eg a wage/salary. Income doesn’t need to be paid back.

Question 2

What is cash inflow

Answer 2

Money coming in (income). We need to know how much income we get each week or month so we can allocate this to things we need to pay for.

Question 3

Cash outflow

Answer 3

Money going out ( spending or expenditure)

Question 4

Give examples of places you can borrow cash

Answer 4

Friends and family
Banks
Large supermarkets
Payday lenders

Question 5

What is interest

Answer 5

The extra money the bank give you for having cash stored in their bank

Question 6

What happens to savers and borrowers if interest is high?

Answer 6

Good for savers, bad for borrowers

Question 7

Name 3 types of savings accounts

Answer 7

Cash ISA (individual savings account) - lump sum or monthly deposit for a fixed period of time which offers you tax free savings
Instant access savings account- allows you to withdraw cash at any time
Regular savings account - requires you to deposit the same amount of cash every month

Question 8

Name 4 factors that can affect wether we spend or save our money

Answer 8

If the price of a product changes
If tax rates change
If interest rates change
If we become unemployed

Question 9

What is disposable income?

Answer 9

The amount of income households have available for spending and saving after taxes have been accounted for