Finance

Question 1

needs

Answer 1

Something that you have to have in order to survive eg. shelter, water, food

Question 2

wants

Answer 2

Things that we would like, but do not need

Question 3

scarcity (resources)

Answer 3

in short supply; the gap between our unlimited wants and our limited resources

Question 4

opportunity costs

Answer 4

Value of something you have to give up to acquire/achieve something else

Question 5

cost vs benefits

Answer 5

Assessing the strengths and weaknesses of a decision to decide what choice you are going to make

Question 6

wages vs salaries

Answer 6

Salary - money paid to people who are employed on a yearly basis.
Wage - money paid to people for a period of work. The period is usually a week, and the number of hours worked will determine how much they get paid.

Question 7

social security

Answer 7

payments from the government

Question 8

disposable income

Answer 8

The income remaining after deduction of taxes. It is the money available to be spent or saved.

Question 9

PAYG

Answer 9

Instead of young a large tax payment at the end of the financial year. You pay regular payments (usually quarterly) instead

Question 10

GST

Answer 10

tax on goods and services

Question 11

Stamp duty

Answer 11

State government tax on certain transactions, such as the sale of a house or car

Question 12

company tax

Answer 12

Federal government tax levied on company profits

Question 13

capital gains tax

Answer 13

Federal government tax on benefits, such as a car or low- interest loan, paid to the employee

Question 14

circular flow

Answer 14

5 sector economy of buying and selling goods and services

Question 15

net income

Answer 15

the amount a person has left after income tax is deducted

Question 16

impulse buying

Answer 16

buying something without giving much thought as to whether you really need it

Question 17

bankrupt

Answer 17

when people cannot repay debts to creditors, they can seek relief from some or all of their debts

Question 18

repossession

Answer 18

to take back goods bought on credit if repayments have not been made

Question 19

default notice

Answer 19

customer protection giving them at least 30 days to repay any arrears before court action or repossession is initiated

Question 20

guarantor

Answer 20

someone who guarantees to pay back the money if the borrower does not

Question 21

loans secured and unsecured

Answer 21

the interest rate on an unsecured personal loan is normally high because the lender accepts a higher risk that you may not be able to pay it back. The security for a secured personal loan is usually the asset being purchased and, if you fail to pay the loan, the lender can take the item back from you

Question 22

simple interest

Answer 22

interse

Question 23

simple interest

Answer 23

interest paid to you or by you and is calculated once per period, usually annually, on the amount of the capital alone and not on any interest already earned

Question 24

savings plan

Answer 24

a commitment to regularly put aside some money for future use

Question 25

interest

Answer 25

a payment made for the use of money that has been borrowed

Question 26

credit

Answer 26

borrowed money. the ability to receive goods and services now, but to pay for them in the future

Question 27

credit

Answer 27

borrowed money. the ability to receive goods and services now, but to pay for them in the future

Question 28

garnisheed

Answer 28

a certain amount of money can be taken out of the borrower’s wages

Question 29

budget

Answer 29

plan to save money

Question 30

establishment costs

Answer 30

one-off costs involved in setting up your new place to live or a business e.g. rental bods, telephone connections, furniture

Question 31

ongoing costs

Answer 31

recurring costs such as rent, mortgage, electricity bills

Question 32

fixed costs

Answer 32

occur regularly e.g. food, transport, mobile phone

Question 33

variable costs

Answer 33

are not fixed e.g. holidays, new skateboard, movies

Question 34

factors that will influence your ability to get a loan

Answer 34

• stable job
• employment history
• address history
• income details
• previous credit history
• a listing of your assets
• a listing of your liabilities

Question 35

dividends

Answer 35

a share of the company’s profits they pay to shareholders each year

Question 36

government bonds

Answer 36

a type of debt-based investment where you loan money to the government in return for an agreed rate of interest

Question 37

superannuation

Answer 37

form of long-term saving where your money is put away for retirement

Question 38

shares

Answer 38

companies divide their stocks into small equal parts and people buy them as a share in the company. If the company’s value increases, the price of the shares go up and investors make a profit.

Question 39

commission

Answer 39

system of payment based on a percentage of the value of sales or other business done, or a payment to someone working under such a system.

Question 40

royalties

Answer 40

Royalties are payments to owners of property for use of that property. Royalties often deal with payments for the right to use intellectual property (IP), such as copyrights, patents, and trademarks.

Question 41

dividends

Answer 41

Dividends are a portion of a company’s profit given out to shareholders for investing into a company. The more shares you have with said company, the larger the payout.

Question 42

direct tax

Answer 42

a tax levied on an individual directly from the government and comes out of your pay cheque e.g. this is income tax.

Question 43

indirect tax

Answer 43

collected by the intermediary (e.g. retail store) fro the person who person who is paying the tax (e.g. consumer) e.g. sales tax, GST, consumption tax

Question 44

sources of income

Answer 44

• wage, salary, fee, commission (working for an employer)
• profit (working for yourself; that is, running your own business)
• social security (payments from the government)
• interest, dividends (investing savings and retirement money)
• rent (renting out property)
• royalties (creating or inventing something new, such as writing a book or composing music)
• prize money (playing professional sports or being a professional gambler)