Finance

  • Created by: anitax
  • Created on: 15-11-18 09:57
what is the bartering system?
the exchange for goods and services, which relies on a double coincidence of want
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intrinsic value?
an item valuable in its own right which can change e.g gold
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what are the features of money ?
DDSSHARP- divisable, durable, scarce but sufficent, stable, homogenous, acceptable,reconisable, portable
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what are the 3 functions of money?
a unit of account, means of exchange and store value
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what is purchasing power?
the amount of goods and sevices you can buy, this is different as time changes
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what are the stages of the life cycle ?
new born/infant, childhood preschool, childhood school, teenager, younge adult, mature adult,middle age, late middle age, old age, death
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explain needs, wants and aspirations
need- essential items for survival, wants- optional items, aspire-to save/ buy in the future
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what does external influences mean ?
outside of an individuals conrol
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what is a standing order?
instructions to pay the same amount each month
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what is a direct debit?
automatic payment to an account which can be different amounts
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what is faster payments?
it is a electronic payment service offered by all uk banks , this transfers money within hours however the limit is 10,000
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what is CHAPS?
automatic payment service for larger amounts of money for paying bills like mortgage, this comes with a charge which varies to the amount being transfered
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what are the types of current accounts?
Basic bank accont, standing current account, youth account, student account, joint account, package account and premium account
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what is consumer price index ?
: is used to measure the inflation rate managed and quoted by the Bank of England.
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what is retail price index ?
used to measure the inflation rate including mortgage interest payments and other owner costs while CPI does not.
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what are the types of ISA's ?
individual saving account, junior ISA, held to by ISA's and life time ISA's
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what is the finincal service compensation scheme ?
guarantees up to £85,000 of the UK savings in banks anything over is not covered if that bank goes bankrupt.
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what is the national savings and investments
people who want to 100% of their saving to be covered, regardless of the amount. They should save with NS&I which is backed by Her Majesty’s Treasury.
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cash verus stocks and shares?
This is cash saving rather than investments linked to stocks and shares. These type of investments are risky as value can change by losing or gaining according to the movement in the stock market.
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what is APR?
annual percentage rate; this is the cost of credit each year which is expressed as a percentage of a loan amount it’s the charge of borrowing money
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what is an overdraft
this is when your taking out money out of the bank and you go below zero so you need to pay it back wihtin a certain amount of time
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what is a store card?
som retailer have store cards which customers can use (take now, pay later) its like a credit card and u borrowed money and you have to pay this back in a certain amount of time
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what is a charge card?
These are credit cards that cards which must be repaid in full every month as the card holder cannot borrow any money beyond the interest free period. They do not have interest or APR. Issuers charge fees like service fees and annual fees
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what is a personal loan?
Personal loans allow people to borrow a fixed amount of money over a stated amount of time. The APR is fixed for the term of the loan. The people who can afford a big loan and to pay over a shorter time will have a low APR.
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what are the types of credit cards?
low APR cards, 0% introductory APR and handling fee, cash back cards, reward cards, charity donation cards, first credit cards, forgein cards and gold platinum and black cards
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what is credit card?
Credit cards to borrow the money and pay at the end of the month when their statement comes through. When you use a credit card it involve the card holder, the merchant, the merchants’ bank (acquirer) and the card holder’s bank (issuer).
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what is an credit history ?
the record of your borrowing money and repaying history, providers check this to see if they can trust a person
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what are the types of providers ?
banks, post office, building societies, national saving and investments and credit unions
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explain a bank ?
Banks are widely used and known on the high street, they offer a full range of services, they enable people to make transactions, save, invest, borrow and protect
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what are the advantages and disadvantages of a bank?
Advantages; customers have an easy access to all services and it all done from one company. This makes it safer and easier to track, Disadvantages;that as it it a large company the customer service is busy and not efficient, golabl changes can effect
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explain what a building society is ?
These are organisation owned by the customers, who are called members. They offer a range of services but depending on amount and they work with partners rather than doing it themselves like insurance so customers would be advised to an organisation.
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what are the advantages and disadvantage of builing socities
The advantages of building societies is that all customers members have a say in how the society is ran. Also they do not offer shareholders so there profit doesn’t dividends profit. The disadvantages are that it is small so there won’t be much money
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what is Demutualisation?
the changer of a building society becoming a bank
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what is a credit union ?
Credit unions are similar to building societies as they are both ran by their members. However the difference is that there must be a shared common bond between the Individuals. This can be the area they live or work, specific employer, work in a par
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what are the advantages and disadvantage of a credit union ?
they have a lower operating cost than other providers, the profit generated goes to the members to benefit them, local and community focused, they inspire customer loyalty though the common bond.and the disadvantage is they only offer a small range o
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explain what is a national saving and investment is?
This is an executive agency of the Chancellor of the Exchequer. People who buy into the products, their money goes into the government to borrow so they are ensured they have 100% money guaranteed by the Treasury.
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explain the post office ?
The post office is very popular and has many branches across the country, the post office also offers the full range of services and products. This includes; current, saving accounts, loans, ISA’s, card accounts, insurance, life cover and pet insuran
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what products are offered by the post office ?
there is a wide range like all other banks, but they also have products designed for people on low income likeThe ‘budget card’ is an electronic purse, people can top it up and use it to pay for anything they need. There is also a ‘post office card
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what is FCA & PRA ?
financial conduct authority and prudential regulation authority, the regulations are set out for providers to follow.
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what is financial Ombudsman service
protects customers if their provider defaults, this includes repaying customers deposits up to £85,000 if their provider cannot.
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what is a regulator ?
This is the process of supervising the actions of financial service providers. This is good as it promotes consumer confidence and protects people.
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what is the PRA resonsablilty ?
the banks, building societies, credit unions, insurers and major investment firms. PRA Is part of the bank of England and parliament. It is funded by fees paid by providers.
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what is the FCA responsible for ?
Financial conduct authority is independent. It reports to the Treasury and can receive direction from the financial policy committee. Providers that are regulated by the FCA have to pay a fee to cover its running costs.
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what is Financial Ombudsman service FOS?
Is independent and set up by the parliament to sort out individual complaints that consumers and financial business aren’t able to resolve themselves. The services they provides are free to costumers
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what is the The Financial service compensation scheme FSCS ?
The FSCS will repay customers their deposits in providers authorised by the Financial Conduct Authority FCA if the provider is unable to do so. The FSCS will cover banks, building societies and credit unions. It makes no fee from customers
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what is the Competition and Markets Authority CMA
This took over many of the functions of the Competition commissions and office of fair trading. The CMA role is to make markets work well for consumers, businesses and fro economy’s.
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what is budgeting?
- is a financial plan that shows a person’s income and expenditures for a defined period of time, such as a month
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what is income ?
this is the amount of money coming in, this can be earnered income or uneared income like work, benefits and gifts
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what is an Mandatory expenditures?
this mean that is a 'have to ' by law like council tax and motor insurance
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what is Essential expenditures?
- is spending on items that people need to live on which includes, rent or mortgage, food and drink, water supplier, gas and electricity, basic clothing, loan repayments and travel.
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what is Discretionary expenditures ?
Is voluntary spending on products and services that people want now, and things they are saving towards
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explain a balance ?
The budget balance is total income minus total expenditures, if the balance is zero then it is called balanced, if its in surplus then its called postive blance, if it is in deficent then its called negative balance
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what is Cash flow and forecasts ?
People can use cash flow forecasts to predict incomings and outgoings over several time periods and identify when irregular income, when large payments will be made, when might a surplus be.
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what are the main types of inurance?
general insurance: motor insurance, building and home conents, travel and pet; life cover, health insurance;pension polices
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what are premiums ?
The price of an insurance policy is called the premium. The price is based on; how likely is the event to occur, the amount of money needed, the length of time to put things right, how will it be paid e.g. monthly instalments
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what is motor insurance
The road traffic act makes it compulsory for people who drive to have a least third party motor insurance
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types of motor insurance?
• Third party, third party; protect other people, vehicles and property in the event of an accident that was deemed to be your fault fire; third party fire and theft covers additonals like theft and fire; Comprehensive motor insurance
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Other cards in this set

Card 2

Front

intrinsic value?

Back

an item valuable in its own right which can change e.g gold

Card 3

Front

what are the features of money ?

Back

Preview of the front of card 3

Card 4

Front

what are the 3 functions of money?

Back

Preview of the front of card 4

Card 5

Front

what is purchasing power?

Back

Preview of the front of card 5
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