National 5 Economics - Personal Economics

What is income?

• Cash going out

• Cash coming in

• Cash saved

• Cash borrowed

Which of the following is a source of income that does not need to be repaid?

• A loan

• A grant for education

• A credit card advance

• A mortgage

What is a loan?

• Money given as a gift

• Money that must be repaid

• Money earned from a job

• Money received from a scholarship

What is one reason people might save money according to the text?

• To buy more expensive clothes

• To spend every penny of their income

• To save for a "rainy day"

• To increase their utility bills

Which of the following is an example of spending on leisure?

• Paying utility bills

• Buying ingredients for meals

• Going to the cinema

• Purchasing work clothes

What might people do if the economy is not doing well?

• Spend more on holidays

• Save some of their income "just in case"

• Buy more expensive goods

• Increase their spending on sports activities

Why do people need to create a budget when they save?

• To increase their spending

• To plan to put aside cash

• To buy more clothes

• To spend more on travel

What is the purpose of budgeting in decision making?

• To increase spending

• To categorize cash inflows and outflows

• To avoid making any financial plans

• To eliminate all expenses

What is considered a cash inflow?

• Money spent on groceries

• Money coming in (income)

• Money used for rent

• Money paid for taxes

Which of the following is an example of a cash outflow?

• Receiving a salary

• Paying for a car

• Winning a lottery

• Getting a loan