What is the ‘cumulative effect’?

People taking the same decision that could result in a ‘bubble’

Which of these is NOT a good financial choice?

Buying a luxury item with a high loan interest rate

What is ‘interest’ on loans?

The cost of using someone else’s money

Which of these is NOT a feature of demand-pull inflation?

The supply chain can keep up with the demand

What is an ‘Economic Cycle’?

A repeating pattern of economic growth and decline.

How would describe ‘internal migration’?

Moving around within a country.

Which of these is FALSE when considering the Consumer Price Index (CPI)?

It is expressed as a value in £s

The study of population and its changes.

Which of these is NOT a feature of cost-push inflation?

The cost of goods and services decreases

What is ‘inflation’?

The rate of increase in the prices we pay for goods and services

Which of these is NOT a main feature of ‘interest’?

It is a measure of popularity in a product

The interest received on savings is affected by inflation such that: Real Interest Rate = ….

Nominal Interest Rate – Inflation Rate

What features would describe a place as a commuter belt?

Most inhabitants work somewhere else.

Which of these does NOT represent a measure of interest rates?

Equivalent Percentage Rate (EPR)

Which of these is NOT good money management?

Spending money on designer items

What is NOT a main effect of good financial choices?

An increase in personal debt levels

Which of these is a good savings account?

Interest is paid at a higher rate than inflation

What is the ‘Bank Rate’?

The official interest rate at which the Bank of England lends money.

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MJMaths LiBF Unit 1 Topics 7-9 Quiz

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This is Topics 7 to 9 questions created to help with Level 2 AiFE / CeFE Unit 1 examination. Search MJMaths to find lots more for Units 1 and 2 AiFE material.

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Questions 46

Answers

1
What is ‘Hyperinflation’?
Inflation is under control
Money increases in value
Extremely high inflation rates
Extremely low inflation rates
2
What is the ‘cumulative effect’?
People taking the same decision that could result in a ‘bubble’
Moving all debts into one location
Saving money in a bank or building society
Having less money than budgeted for
3
Which of these is NOT a good financial choice?
Planning ahead
Staying within budget
Choosing financial products wisely
Buying a luxury item with a high loan interest rate
4
Which of these reduces real income?
High inflation Rates
Low inflation Rates
Less taxation
More earnings through employment
5
Urbanisation is…
High Rise Building in cities.
Moving to the countryside.
Moving away from the cities.
Moving to the cities.
6
Typically, how long does the average ‘Economic Cycle’ last?
1 to 2 years
5 to 10 years
2 to 5 years
10 to 20 years
7
‘Personal Finance’ is how you use your money. It is also known as?
How to save
Earnings
Spending Methods
Money Management
8
The interest rate on a savings account is 3%. Inflation is 2%. In real terms the money would grow by?
2%
5%
3%
1%
9
What is ‘interest’ on loans?
The total amount you pay back overall
Another word for the ‘principle’
The cost of using someone else’s money
The total amount you pay back each month
10
Which of these is NOT a feature of demand-pull inflation?
The supply chain can keep up with the demand
There is an increase in the demand for goods and services
Goods and services become unavailable
Prices are driven up as people are prepared to pay more
11
What features would NOT see during an expansion period in the Economic Cycle?
Unemployment is Low
Inflation is Low
Interest Rates are High
Production is High
12
What is an ‘Economic Cycle’?
A rotating situation of economic changes.
A repeating pattern of economic growth and decline.
A pattern of inflation and deflation.
How interest changes vary over time.
13
Which of these is a want and not a need?
Food
Shelter
Going out clothes
Essential Clothes
14
Which of these factors has the smallest influence of the economic cycle?
Gross Domestic Product
Employment Rates
Consumer Debt
Levels of spending
15
How would describe ‘internal migration’?
Moving into a country.
Moving around within a country.
Moving out of a country
Moving around within a continent.
16
Which of these is FALSE when considering the Consumer Price Index (CPI)?
It is calculated monthly
It is the most common measure of inflation
It is based on a ‘basket’ of goods
It is expressed as a value in £s
17
What is Demography?
The study of population and its changes.
The study of financial history
The study of Ancient Greece
The Study of Economics
18
Which of these is NOT a feature of cost-push inflation?
Businesses have to pay more for their raw materials or production costs
The cost of goods and services decreases
Businesses keep the same amount of profit
Businesses charge more to customers
19
Bob received a 2.75% increase in pay. Which inflation rate means he has more purchasing power of his salary?
2.75%
2.5%
2.25%
3%
20
Which of these are NOT the three demographic factors that affect the economy?
Ageing Population
Geographic Distribution
Education Standards
Patterns of Migration
21
What are the main factors for an ageing population?
None of Them
Improved Life Expectancy
Falling Birth Rate
Both of Them
22
Which of these does NOT occur as a result of a high ‘Bank Rate’?
An increase in spending
Higher interest rates
Spending decreases
Savings increase
23
What is ‘inflation’?
The How much extra we have to pay for items to cover staff wages
Another word for VAT
The rate of increase in the prices we pay for goods and services
The amount of tax we pay on savings
24
Which of these is NOT a main feature of ‘interest’?
It is a measure of popularity in a product
It is the cost of borrowing
It changes over time
It rewards savings
25
The interest received on savings is affected by inflation such that: Real Interest Rate = ….
Bank Rate – Nominal Interest rate
Nominal Interest Rate – Bank Rate
Inflation rate – Bank Rate
Nominal Interest Rate – Inflation Rate
26
What is the main influence on personal finances?
Inflation Rates
Government policies and taxes
Interest Rates
All of Them
27
What factor does a bank use to determine its rate to a borrower?
Competition with other lenders
All of Them
The level of the Bank Rate from the Bank of England
Risk factors such as personal credit rating
28
During a recession, which one does NOT usually happen?
Pay Cuts
Increased consumer spending
Job Losses
Housing and Investment Falls
29
Poor financial choices can lead to:
High risk borrowing
Less saving and less spending
High levels of personal debt
All of Them
30
What features would describe a place as a commuter belt?
Most inhabitants work somewhere else.
Most workers work locally.
They are near a train station.
They use the local amenities.
31
What is the most important factor to aid a comfortable retirement?
Work for longer.
Spend less during retirement.
Retire older.
Save for retirement.
32
Which of these does NOT represent a measure of interest rates?
Annual Equivalent Rate (AER)
Equivalent Percentage Rate (EPR)
Annual Percentage Rate (APR)
Equivalent Annual Rate (EAR)
33
Which of these is NOT a benefit of saving more and spending less?
Banks pay interest to savers
Banks have more money to lend to individuals
Having money for an emergency
Businesses get more income
34
What was the 2017 level of total UK personal debt?
£1.566 billion
£1.566 million
£1.566 trillion
£1.566 thousand
35
Which of these is NOT good money management?
Protecting your possessions with insurance
Planning for the future
Borrowing to buy your own home
Spending money on designer items
36
Which of these is NOT part of the ‘Economic Cycle’?
Expansion
Recession
Peak
Slowdown
37
Which of these would have the biggest impact in reducing the cost of an ageing population?
Higher Taxes
Allow greater levels of immigration.
Raise the retirement age.
Compulsory Retirement Savings
38
Which of these is NOT an implication of an ageing population?
More Unemployment.
Increased Pension Bill
Reduced Tax Revenue
Extra Healthcare Costs
39
What is NOT a main effect of good financial choices?
Increased spending and saving
Less overall borrowing
An increase in personal debt levels
Less ‘bad debt’ in the economy
40
Which of these is a good savings account?
Interest is not paid
Interest is paid at a lower rate than inflation
Interest is paid at a higher rate than inflation
One where the real worth of our money decreases over time
41
Who sets interest rates to control inflation?
The Government
The Bank of England
The Prime Minister
The Chancellor or the Exchequer
42
What is the ‘Bank Rate’?
The rate at which banks lend money to consumers
The amount that Bank add onto the Bank of England rate to make their profit
The rate at which banks pay interest to savers
The official interest rate at which the Bank of England lends money.
43
The usual outcome of a slowdown is:
Recession
Low Interest Rates
Boom Period
Increased Productivity
44
What is the main individual decision when managing money?
Consideration of financial constraints
All of Them
Consideration of short, medium and long-term goals
Consideration of priorities and trade-offs
45
What does the MPC in the Bank of England stand for?
Monetary Purchasing Council
Monetary Penalty Convocation
Monetary Price Consumption
Monetary Policy Committee
46
What is the current inflation rate target per annum?
1%
2%
4%
3%

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