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