Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics > Savings, Income & Borrowing > Flashcards

Savings, Income & Borrowing Flashcards

1
Q

Why do people borrow?

A 
To pay other debts
Overcome a shortfall of cash
Travel
To buy necessities you can't afford
To buy things they don't have money for
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

How much you can borrow depends on?

A 
Income
Past credit history
Assets that you own
What your buying
Job (how secure) 
Existing liabilities
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Advantages of borrowing

A

Be able to buy something you need now/fast

Buy something expensive eg: house

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Disadvantages of borrowing

A

Have to pay back more than you borrow with interest and fees

Encourages you not to save for something

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Ways to save?

A 
Piggy bank
Under the bed
Savings account
KiwiSaver
Shares
Bonus bonds
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Define income

A

Money or assets we receive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Define wealth

A

The assets a person owns (after deducting liabilities/debt)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Examples of earned income

A 
Commission
Salary
Wages
Pocket money (sometimes)
Profit
Fees
Royalties fringe benefit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Examples of unearned income

A 
Benefit
Interest
Scholarships
Gifts
Pocket money (sometimes)
Selling property *capital gain*
Gambling
Dividends
Rent
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Wages are paid

A

Based on how many hours you work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Salaries

A

Are a fixed amount for the year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Rent is

A

Paid to the owners of land or property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Interest is paid to

A

People who have money saved or invested in a bank

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Profit is

A

Paid to the owners of SUCCESSFUL businesses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Commission is paid

A

As a percentage of what the person sells eg: real estate agent, insurance sales person

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Fees are charged

A

By professional people for services provided at a set rate eg: doctors, lawyers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Dividends are

A

Unearned income received from having shares

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Superannuation is paid to people

A

When they retire

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Social welfare is a

A

Benefit from the government given to the economically disadvantaged

20
Q

Capital gains is when

A

You buy property and sell it for more

21
Q

Inheritance is when

A

The wealth of people who die is passed onto others

22
Q

Gambling is when

A

People sometimes win when they invest in lotto or races

23
Q

Royalties is for people

A

Who write books or songs and are paid according to the number sold

24
Q

Fringe benefits are

A

Extra benefits that people get such as free meals, company cars etc.

25
Q

What are the the two types of income tax in New Zealand?

A

P.A.Y.E pay as you earn

RWT residents withholding tax

26
Q

The more income you earn in NZ the more ______________

A

Tax you pay

27
Q

Limitations on income include

A 
Time
Endowment - what people are born with
Skills
Lifestyle
Cultural and family responsibilities
Government policies
28
Q

16-19 years olds earn a minimum wage of?

A

$11

29
Q

Types of borrowing include

A 
Credit card
Fixed term contract or hire purchase
Bank loan
Student loan
Mortgage 
Borrowing from family and friends
Bank overdraft
30
Q

Bank overdraft definition

A

When you take out more money from your bank account than you have in there you go into overdraft which is a debt

31
Q

Mortgage definition

A

Borrowing large amounts used for buying a house. The house becomes collateral

32
Q

Personal loan definition

A

Just money loaned for whatever use

33
Q

Secured loan definition

A

Assets/security items are used as collateral/safety for they bank. They can reposes those items if you don’t pay.

34
Q

Unsecured loan definition

A

A loan in which the bank takes your word that you’ll pay it back. Penalty fees if you don’t pay

35
Q

Student loan definition

A

Money lender to pay for education

36
Q

Fixed term contract (hire purchase) definition

A

Pay back in regular instalments. You get what you wanted straight away and have to pay it back while you’re using it

37
Q

Credit cards definition

A

Plastic card you use to but things on credit. You get what you WANT NOW but have to pay it back later on set amounts. Interest if you don’t pay it within 30 days or so

38
Q

Store charge card definition

A

A card issued by the store you use for purchases in that store

39
Q

Bank overdraft interest rate

A

Medium ~15%

40
Q

Mortgage interest rate

A

Low ~5.75%

41
Q

Personal loan interest rate

A

Medium

42
Q

Secured loan interest rate

A

Lower than unsecured loan

43
Q

Unsecured loan interest rate

A

Medium

44
Q

Student loan interest rate

A

No interest

45
Q

Fixed term contract (hire purchase) interest rate

A

Can have very high interest

46
Q

Credit card interest rate

A

Highest interest rate 20%+

47
Q

Store charge card interest rate

A

May have high interest on unpaid amounts

Economics (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions