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Financial Literacy
Financial Literacy
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Specimen Questions
Flashcards
40 cards
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Practice quiz
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Questions
40
Answers
1
It is thought that the overdraft was invented in:
Ireland
Wales
England.
Scotland
2
When more people are employed by businesses:
more National Insurance is collected.
more Jobseeker's Allowance is paid.
the national debt goes up.
less National Insurance is collected.
3
Weak currencies can mean:
higher rates of unemployment.
lower export levels.
higher interest rates.
more tourists.
4
A commuter belt is where people:
live and usually work.
travel in to the countryside for work.
live, but they usually work elsewhere.
work, but they usually live elsewhere.
5
Interest is the cost of:
using your own money.
using someone else’s money.
spending instead of saving.
saving instead of spending.
6
The term for people moving from one town or city in the UK to another is:
emigration.
internal migration.
immigration.
urbanisation.
7
The amount of interest paid by a savings acc before taking inflation into account is known as:
simple interest
gross interest.
net interest.
nominal interest.
8
A term used by the regulator to describe good financial management is financial:
know-how.
competence.
capability.
capacity.
9
When interest rates fall, this is bad news for people with:
credit cards.
overdrafts.
mortgages.
savings.
10
Which of the following is exempt from value added tax?
Postage stamps.
Furniture.
Biscuits.
Adults' clothing.
11
Interest that is calculated only on the principal amount is known as:
net interest.
gross interest.
compound interest.
simple interest.
12
A decrease in income tax is likely to have which of the following effects?
People are likely to make spending cuts.
People are likely to save more.
People are likely to borrow more.
Work is likely to become less attractive.
13
Disposable income is:
income minus taxes.
pay before deduction of tax and National Insurance.
gross pay minus taxes and National Insurance.
income minus all expenses.
14
Which of the following events is
most
certain?
Emigrating to another country.
Being made redundant.
Reaching old age.
Getting a divorce.
15
Over time, the value of money:
accumulates.
stabilise
appreciate
depreciate
16
The decimalisation of British currency occurred in the:
1960's
1950's
1980's
1970's
17
If the nominal interest on a savings acc is 5% and inflation is at 3%, what is the real rate?
3%
8%
5%
2%
18
Which of the following countries uses dollars?
Germany.
Australia.
Japan.
United Kingdom.
19
The main source of a full-time teacher's income is
most likely
to be:
savings income.
pension income.
sate benefit
salary
20
Low inflation results in:
greater levels of savings.
more expensive houses.
lower interest rates.
greater unemployment.
21
Rapidly rising house prices most favour:
savings accounts.
people trying to buy their first home.
tenants wanting to buy.
homeowners with no mortgage.
22
The most popular country for British people wanting to emigrate to is
the Netherlands.
Germany.
the Philippines.
Australia.
23
A 17-year-old taking A levels will usually be
least
concerned about:
mortgage rates.
the cost of driving lessons.
student loans.
minimum-wage rates.
24
Japan's currency is:
dollars.
yen.
euros.
pound sterling.
25
Taxes are government:
revenue.
borrowing.
spending.
interest.
26
A way of becoming a UK citizen is by:
immigration
emigration.
voting
naturalisation
27
Which of the following combinations leads to a financial 'bubble'?
High prices, high demand.
Low prices, high demand.
Low prices, low demand.
High prices, low demand.
28
If the exchange rate is 1 GBP = 1.21 euros, how many euros can you get for £150?
€150.
€181.50.
€123.97.
€80.70.
29
Which of the following groups of people is likely to have the most
irregular
income pattern?
Children.
The employed.
The retired.
The self-employed.
30
Poor financial choices can lead to:
increasing debt.
less spending.
effective planning.
lower interest rates.
31
The system under which employees pay tax is known as Pay As You:
Save
Earn
Go
Work
32
In order to measure CPI, the ONS identifies a basket of goods and services that:
is reflective of what a typical individual buys.
includes what is used by all households.
includes what is used by all individuals.
is reflective of what the average household buys.
33
An increase in the personal allowance will mean that a taxpayer should have:
less net pay.
more net pay.
more gross pay.
less gross pay.
34
Which of the following statements relating to the third sector is correct?
Social enterprises are not permitted to make a profit.
It includes charities and social enterprises.
It has no economic impact.
It exists to make a profit.
35
The UK government's inflation target is:
4%
1%
2%
3%
36
Lower interest rates mean people will:
save more
borrow less.
spend more
spend less
37
Which of the following does inflation measure?
The rate of increase in prices.
The cost of borrowing.
Interest rates.
Economic growth.
38
If the £ is stronger against the euro then when Natalie visits France next week she will:
get the same number of euros for her pounds sterling.
get fewer euros for her pounds sterling.
pay more commission.
get more euros for her pounds sterling.
39
The main purpose of taxation is to:
encourage spending.
fund public spending.
encourage earning.
fund social enterprises.
40
Poor financial choices can lead to:
people saving more money.
low levels of personal debt.
falling prices.
overspending.
