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CEFE > Paper One > Flashcards

Paper One Flashcards

1
Q

what is the national budget?

A

the national budget which is set annually allows the government to see where money is needed the most

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2
Q

what does public spending do?

A

public spending ensures that all people have a good standard of living

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3
Q

who sets the national interest rates?

A

Bank of England

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4
Q

what changes in economic activity during a recession?

A

people spend and save less because they have a lower income as jobs and benefits are lost

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5
Q

what happens is there is less income in a country?

A

less income = less tax = less public spending

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6
Q

what happens to the economy during boom periods?

A

there is much more money in the system and there are higher employment rates and increased levels of spending

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7
Q

during and economic boom what happens to inflation and interest rates?

A

however this may mean that interest rates and inflation will rise which may lead to a recession

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8
Q

why does increased inflation and interest rates lead to a recession?

A

once again there are high levels of debt and many will be unable to pay them

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9
Q

do personal values have an impact on financial management ?

A

personal values have a HUGE impact on how individuals manage their finances because people make decisions on what they think or believe

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10
Q

what is a period of austerity?

A

this is when people cannot spend much money

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11
Q

what is austerity?

A

a government measure to reduce the amount of money it spends, usually reduced wages and benefits - this leads to financial hardship for the whole population

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12
Q

what is fiscal policy?

A

the decisions a government makes about taxes and what to spend public money on

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13
Q

what is a surplus?

A

more money coming in than being paid out

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14
Q

what is a deficit?

A

more money paid out than in

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15
Q

what is net income?

A

money that is left over from your income after the government tax and charges have been taken

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16
Q

how is giving to charity viewed as?

A

this is seen as a positive contribution to society and is rewarder through tax schemes and incentives

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17
Q

what does the government spend the most money on? (sector)

A

pensions

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18
Q

during an economic boom what is employment and debt rates like?

A

both debt rates and unemployment is low

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19
Q

what does the government do during recessions to stimulate the economy?

A

raise public expenditure

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20
Q

what is disposable income?

A

money left over after paying bills and putting money in savings

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21
Q

why can’t the government print more money when there isn’t enough?

A

this will cause hyperinflation which is a very high rate of inflation

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22
Q

what was the first country to use polymer banknotes?

A

Australia

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23
Q

where is majority of money in the UK economy held

A

Bank Accounts

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24
Q

what was the system called before people used money

A

bartering

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25
Q

what time does money date back to?

A

650 BC

26
Q

what is the main purpose of money?

A

to provide a means of exchange so we can buy goods and services and so the provider can receive payment

27
Q

what are some main features that money should have?

A

portability
durability
holding value

28
Q

where can we get money from?

A

the bulk of our money comes from our work but people also get money through gifts, interest in savings, benefits and pocket money

29
Q

where are the coins made in the UK

A

The Royal Mint

30
Q

what does the Equality act of 2010 state?

A

employees should receive equal money for the equal work

31
Q

who does the national minimum wage not apply to?

A

those who are self employed and under school leaving age

32
Q

what is a universal benefit

A

a benefit for everyone in certain circumstances

33
Q

what is cashflow?

A

all your money coming in and going out

34
Q

what is your gross income?

A

the income you receive before any deductions are made

35
Q

what is disposable income?

A

the part of your income that you can choose to use in whatever way you want after all expenses are paid

36
Q

what is a high level of exise duty charged on?

A

alcohol tobacco and fuel

37
Q

what is capital gains tax?

A

tax on the increase in value of an asset

38
Q

what is corporation tax?

A

tax paid by businesses

39
Q

what is direct tax?

A

tax which is taken directly from income or wealth

40
Q

what is indirect tax?

A

this is tax paid within the price of goods and services

41
Q

what type of tax is VAT an example of

A

Flat Rate Tax

42
Q

what is inheritance tax?

A

tax on the value of property and money after someone dies

43
Q

what does an increase in personal allowance mean for the government?

A

this means it has less money coming in = less money to spend on the public

44
Q

what is a free market economy

A

a type of market economy in which private individuals and co. make decisions

they are motivated by profit

doesn’t involve the gov.

45
Q

what is a mixed market economy

A

all economy that falls between the extremes of a Communist economy and a free market economy

  • UK is a mixed market economy
46
Q

what is a Communist economy

A

a type of economy in which the gov. makes all the decisions

47
Q

what is corporate social responsibility?

A

business self regulation that drives a company to act in an ethical manner

48
Q

what is turnover?

A

the value of sales that a business makes in a year

49
Q

what is the main goal of price stability?

A

maintaining low inflation

50
Q

define full employment

A

everyone who is willing and able to work in paid employment is doing so

51
Q

give an example of a third sector organisation

A

the Salvation Army

52
Q

what are payday loans?

A

a short term loan that is offered at high interest rates that is designed to assist someone until they are next paid

53
Q

who are the FCA and what do they do?

A

financial conduct authority, an agency that regulates financial firms and services

54
Q

what can high levels of debt lead to?

A

more high risk borrowing

55
Q

what does the cumulative effect describe?

A

unintended consequences as a result of many people taking the same decisions

56
Q

what does AER stand for

A

annual equivalent rate

57
Q

what does APR stand for

A

annual percentage rate

58
Q

what does EAR stand for

A

equivalent annual rate

59
Q

what does ISA stand for?

A

individuals savings account

60
Q

what is an ISA?

A

a savings account on which you interest is paid tax free and there are certain rule to this

61
Q

what is demand pull inflation?

A

inflation driven by the number of people that want a certain item or service

62
Q

what is cost push inflation?

A

inflation which is driven by higher production costs

CEFE (1 decks)

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