Financial Decisions 2

United Clothing recently opened a factory in China and is paying their employees according to the number of items they make. What type of wage payment is United Clothing using?

• Piecework
• Commission
• Dividends
• Royalties

Melissa has had three car accidents in the last year. Which cost associated with her insurance, will increase?

• Interest rates
• Wages
• Principal
• Premium

Which of the following is likely to happen if interest rates are increased?

• More consumers would apply for loans
• Less consumers would apply for loans
• Consumer investment would increase
• Business investment would increase

Steve has recently purchased shares in a publicly listed company.What type of return is Steve expecting?

• Rent
• Profit
• Interest
• Dividend

Which of the following is an advantage of comparison shopping?

• It allows a consumer to engage in impulse buying.
• A product can be easily returned if it is faulty.
• It allows consumers to be better informed of their rights.
• It gives consumers stronger bargaining power in relation to price.

Helen was cleaning the BBQ when the top fell on her hand, cutting it deeply. What type of insurance would pay the medical cost of attending to Helen's hand and her rehabilitation?

• Home and contents insurance
• Income protection insurance
• Health insurance
• Life insurance

What is the measure of a person’s ability to repay a debt called?

• Collateral
• Credit rating
• Financial planning
• Financial stability

Rebecca has decided to save money for a new car. She has drawn up a table listing her planned expenses against her planned income. Which financial too is Rebecca using?

• A balance sheet
• A budget
• A profit and loss statement
• Spreadsheets

Kayla is taking out a loan to buy a new car. Her mother has agreed to pay the finance company if Kayla cannot make all repayments. Which role is Kayla's mother playing?

• Creditor
• Debtor
• Guarantor
• Mentor

When would unemployment tend to rise?

• When economic activity is strong
• When there is an increase in retail spending
• When there is a downturn in economic activity
• When more tourists visit Australia