Economics Y9 Test Flashcards
Opportunity cost, What is lost?
The opportunity to buy something else, or do something else.
Ways the government controls credit:
Limiting money on credit cards.
Minimum money repayments.
No access to children.
Prior finance assessment.
What is Debt?
Debt is money owed to the bank or a financial institution. Borrowed under conditions.
What is credit?
Credit is the amount of money that you can borrow.
What is the difference between a store card and a credit card?
A store card you can get store points or discounts, it has standard fees and high interest.
What is a personal loan?
A personal debt is loaned from the bank, often for cars and houses, they have a low interest rate.
What is buy now pay later?
You pay the amount typically over 4 weeks. e.g. $100- $25 per week. You get to take home the goods before paying.
What is a payday loan?
A cash converters quick loan. High interest, instant cash, normally less than $2000.
What is the difference between good debt and bad debt?
Good debt makes you money and increases net worth. e.g. Homes, education, investments. Bad debt is on labilities and decreases net worth, e.g. consumables, car, credit card.
What to do if you feel suspicious of a scam.
Don’t provide information.
Don’t click on links.
Don’t even open.
Some tactics that scammers may use:
Pressure you into making a decision.
Become your friend.
Threaten you.
Claim to be a professional.
Persistently contact anyone who responds.
Who is susceptible to scams?
People are under stress, people are feeling lonely, and it is older generations.
What is the most common type of financial decision?
Interest
Two ways interest can be viewed:
Interest is paid to you in the form of income. It is also known as the reward for saving.
Interest payable to financial institutions for borrowing money. It is the cost.
Why are interest rates low?
Since the global financial crisis in 2008, earnings of banks and consumers have been degraded.
