LIBF Unit 1 Questions and answers, 100% Accurate, Graded A+

LIBF Unit 1 Questions and answers, 100% Accurate, Graded A+ Define the term citizen. - ✔✔-Someone who has the legal right to live in a country; Who decides who becomes a citizen? - ✔✔-The government decide who become ...

LIBF Unit 1 Questions and answers, 100% Accurate, Graded A+ Define the term citizen. - ✔✔-Someone who has the legal right to live in a country; Who decides who becomes a citizen? - ✔✔-The government decide who becomes a citizen. What are societal norms? - ✔✔-These are certain ways citizens expect people in the society in certain ways. Explain multi-cultural citizens and society. - ✔✔-The UK is a multicultural society, this means there are a variety of influences. Outline the role and duties of a citizen in society in the UK (legal, political and economic). - ✔✔-Political - having say in how the country is run, voting; Legal -having a responsibility to obey the law and to be defended by a lawyer; Economic - free healthcare, education and minimum wage, pay taxes; What type of political system does the UK have? - ✔✔-UK political system is known as a constitutional monarchy meaning the queen has to pass off on any laws. Describe how government policies influence personal finance. - ✔✔-People must learn to put aside money for paying taxes. Describe the impact of different types of values held by UK citizens on personal finance choices. - ✔✔- Different people will prioritise money in different ways. Budgeting and financial planning are ways to control spending Saving, spending, borrowing are affected by peoples values for example a young adult may save for a car. Where did it originate? - ✔✔-Money has originated from trading one thing for another Define money. - ✔✔-Money is a medium of exchange- eg: gold; coins; notes; Outline the sources and features of money. - ✔✔-The Royal Mint; Bank of England; De la Rue produce banknotes in Scotland and Northern Ireland: Sources of money: employment; state benefits; investments; gifts; inheritance Features of money: easily recognised by everyone; easy to carry around; available in different amounts; always worth the same amount; hard-wearing Cashless society is approaching, more people are using debit and credit cards; Bitcoin is an open-source, electronic currency that is not controlled by the bank. Define income. - ✔✔-Income flow is the flow of cash earned from employment and benefits Outline the sources and features of income. - ✔✔-Earnings: wages; pocket money; gifts; benefits Features: payslips; gross/net pay; working hours; minimum wage, your income varies through out your life. Describe the difference between money and income - ✔✔-Income is an amount of money earned in a given time period, by a person or an organization. Wealth is the total value of all assets, minus any debts. This is expressed in units of money, and the values are estimates of what they could be sold for. Currency is just the system of money in a particular region or country. Define tax. - ✔✔-Compulsory contribution paid to the state Describe the features and purposes of tax. - ✔✔-Funds state expenditure and national systems, Tax is is used to pay for things around the area you live, i.e roadworks Compulsory (no choice) Fluctuates (can vary) Levied on all areas of life: eg employment; housing; food; fuel Describe the different types of tax. - ✔✔-VAT is paid most of the things we buy, it is a flat-rate tax at 20%; income tax is the tax you pay from your income, this varies depending on how much you earn; Describe the impact of changes in tax. - ✔✔-Government expenditure on services Citizens receive more/less services and this may change their lifestyle or finances Work versus reward Increase in income tax: less incentive to work / work overtime Increase in taxes: less money Decrease in tax / tax relief: increase in money Increase in borrowing / decrease in spending Negative economic activity Explain the nature and role of money in society. - ✔✔-Money as an 'enabler' Cycle of money: increases/decreases in spending linked to increases/decreases in employment, which are linked to increases/decreases in earnings What is corporation tax? - ✔✔-The tax that a business pays on its profits. Describe the different ways a business and other organisations including charities can contribute to the economy of a country. - ✔✔-Corporate tax Income tax paid by employees Business investment Employee training Increase in national wealth through increased employment / proportionate drop in welfare claimants Improvement in the government's deficit Industry sectors; private, public, charity Corporate social responsibility Describe how good personal finance choices have an impact on society. - ✔✔-Less bad debt Less borrowing and increasing spending Increased savings thus more money available by government to lend Individual decisions The cumulative effect Describe how poor personal finance impacts on society. - ✔✔-Increased bad debt More high risk borrowing Economy built on debt: unstable economy / recession Define inflation. - ✔✔-Rate of increase in prices for goods and services Rise in prices relative to money available (the increase in the prices of goods and services, value of money depreciates because of this) Describe the features of inflation. - ✔✔-Fluctuates Influences interest rates Affects the level of state pensions and benefits Higher inflation reduces the value of money Rates of inflation used by businesses to set annual pay rises. Avoid risk of fluctuation by accepting certain but not so great o