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LIBF Unit 1 - topic 1, 2, 3. Questions and answers, 100% Accurate, graded A+

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LIBF Unit 1 - topic 1, 2, 3. Questions and answers, 100% Accurate, graded A+ Austerity - ✔✔-A government measure to reduce the amount of money it spends (usually reduced wages and benefits), ... resulting in difficult financial conditions for a population. Benefits - ✔✔-Money and other financial support (such as reduced bus and train fares or provision of housing) that the government provides for people who are unable to get any other income. Bonds - ✔✔-A certificate that shows you have bought the debt from a company or the government, in return for which the company or government pays a fixed amount of money in interest each year. Budget - ✔✔-A plan for how you will use your income, including spending and saving. Consumer - ✔✔-Someone who uses or buys goods and services. Debt - ✔✔-Money owed to another person or organisation such as a bank. Deficit - ✔✔-More expenditure than income; more money paid out than coming in. Disposable income - ✔✔-The money that is left over from your income after you have paid all of your expenses and have put any savings aside. Earnings - ✔✔-The money that you make from your job. Economy - ✔✔-The state of a country relating to the amount of money that is in the system and the production and consumption of goods and services. Expenses - ✔✔-The things that you have to spend your income on. Fiscal policy - ✔✔-The decisions a government makes about taxes and what to spend public money on. Gilts - ✔✔-A high-interest, very secure government bond (see 'Bonds'). Income tax - ✔✔-Money deducted from your income by the government to pay for public services such as health and education. Income - ✔✔-All the money (or items worth money) that you receive, including through work, investments and government benefits. Interest rate - ✔✔-The money you pay as a charge for the service of using someone else's money - for example, if you borrow money to buy a car, you pay back the money you borrowed plus interest; or the bank pays you interest on money saved as it has access to your money. Investment - ✔✔-Something that you buy because it is likely to make you money in the future - for example, property may increase in value so that you can sell it for more than you bought it and make a profit, or you can rent it out. Mortgage - ✔✔-A large loan to buy a house or property Net income - ✔✔-The money that is left over from your income after government tax and charges have been deducted (take-home pay). Public spending - ✔✔-How the government spends the money it makes (through taxes, for example). Quantitative easing - ✔✔-A government policy that allows the Bank of England to put more money into the economy by creating more electronically and then buying government bonds (see 'Bonds' and 'Gilts'). Recession - ✔✔-A period of economic downturn which means less money moving around the economy; people spend less, wages decrease, unemployment increases, company profits decrease, and so on. Revenue - ✔✔-The income of an organisation or government. Subsidise - ✔✔-Pay part of a bill or pay some money towards a big expense - for example, if your housing is subsidised, you will get money towards paying your rent. Surplus - ✔✔-More income than expenditure; more money coming in than being paid out. What customers will directly benefit of interest rates rise? - ✔✔-People with a variable rate cash isa The financial services (banking reform) bill includes the concept of ring fencing. For a bank this means: - ✔✔-Separating everyday banking activities from investment banking activities What do u have to provide to a bank for proof of address when opening a bank account? - ✔✔-A water bill issued two months ago The consumer credit act provides protection for goods and services paid for with a credit card, up to a maximum value of.... - ✔✔-£30,000 How many attempts does a debit card holder have to enter their correct pin before a transaction is declined? - ✔✔-Three Is it true that discretionary expenses should be shown in a cash flow forecast? - ✔✔-Yes it is! National savings & investments (NS&I) products are guaranteed by..... - ✔✔-HM treasury What body has an objective to promote the safety and soundness of financial providers? - ✔✔-The prudential regulation authority (PRA) Who does the financial conduct authority report directly to? - ✔✔-HM treasury If a bank wishes to close someone's bank account, how much notice must the bank give the account holder? - ✔✔-Two months Is it true or false that a cash flow forecast is used to calculate the monthly net cash position? - ✔✔-True Who is responsible for deducting income tax and national insurance from employees pay? - ✔✔-Their employer Is it true that someone with a good credit history has never borrowed money? - ✔✔-No it's false! What defines the amount a person can earn before they have to pay income tax? - ✔✔-Personal allowance An example of a coincidence of wants... - ✔✔-Roy has for be goats and would like ten sheep. James has ten sheep and would like five goats. This means an exchange can take place. What term describes the value of an amount of money? - ✔✔-Purchasing power From the past, what is a disadvantage of using shells as a medium of exchange? - ✔✔-They were not divisible. What is considered to be money in the UK? - ✔✔-An electronic balance (not a charge card, a cheque or a debit card)! During which personal life cycle stage is an adult most likely to rely on the state for their care and wellbeing? - ✔✔-Old age. Margo lives in England and has outstanding unsecured debts of 16 grand. She cannot make the repayments and wishes to have the debts written off. She can use a debt relief order to achieve this. True or false? - ✔✔-False What is a 17 year olds most likely to be highest expenditure currently? - ✔✔-Learning to drive What is not social economic out of the following?..... demographic, economic, environmental and social. - ✔✔-Environmental What is a demographic factor that affects an individuals life cycle? - ✔✔-Life expectancy What product is best suited for someone planning their financial security for old age? - ✔✔-Personal pension In which stage of the personal life cycle is investment income most commonly needed by people? - ✔✔- Old age What is the most flexible way for someone to meet their borrowing needs? - ✔✔-Overdraft When advertising interest rates, banks must quote the rates on what timely basis? - ✔✔-An annual basis. APR means - ✔✔-Annual percentage rate If interest rates are increasing, who is most likely to be better off as a result? - ✔✔-Someone who is saving. Under bankruptcy and debt relief orders, student loans are never written off. True or false? - ✔✔-True. What is the meaning of the term 'mutual' in relation to building societies? - ✔✔-It means that the building society is owned by its customers. Compared to banks and building societies, the uk governments savings products are generally regarded as very...... ? - ✔✔-Safe In what ways do some financial services providers specialise? - ✔✔-By using some of the possible communication channels. Simon is unhappy with the decision made by the financial ombudsman device regarding his complaint. What action, if any, can he take? - ✔✔-Take the matter to court! Colin holds 5 grand in his current account with a bank that has failed. What is his position with regard to compensation? - ✔✔-A valid claim, and can seek compensation from the Financial services compensation scheme. Aspirations - ✔✔-Things or experiences that people would like to have in the future. Assets - ✔✔-Things that a person or business owns. Bank rate - ✔✔-The interest rate that the Bank of England uses when it lends money to other banks. Demographic changes - ✔✔-Changes to the size and structure of the population. Economic boom - ✔✔-A period when the country is producing and selling an increasing amount of goods and services. Interest rate - ✔✔-The amount that a financial services provider charges a borrower when it lends money, or pays to a saver. Expressed as a percentage. Investments - ✔✔-Money paid into financial products. Life assurance - ✔✔-A type of insurance policy that pays a sum of money if the insured person dies. Life cycle - ✔✔-The stages through which people pass between birth and death. Life expectancy - ✔✔-The number of years that people are expected to live based on the year they were born. Mortgage - ✔✔-A loan taken out to pay for [Show More]

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