Carina Storm
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Level 2 PERSONAL FINANCE (CeFF) Quiz on Specimen Paper B - Unit 1 – Finance, the Individual and Society (FIS), created by Carina Storm on 02/12/2018.

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Carina Storm
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Specimen Paper B - Unit 1 – Finance, the Individual and Society (FIS)

Question 1 of 35

1

A way of becoming a UK citizen is by:

Select one of the following:

  • Emigration

  • Immigration

  • Naturalisation

  • Voting

Explanation

Question 2 of 35

1

Lower interest rates mean people will:

Select one of the following:

  • Borrow less

  • Save more

  • Spend less

  • Spend more

Explanation

Question 3 of 35

1

It is thought that the overdraft was invented in:

Select one of the following:

  • England

  • Ireland

  • Scotland

  • Wales

Explanation

Question 4 of 35

1

Disposable income is:

Select one of the following:

  • Gross pay minus taxes and National Insurance

  • Income minus all expenses

  • Income minus taxes

  • Pay before deduction of tax and National Insurance

Explanation

Question 5 of 35

1

Taxes are government:

Select one of the following:

  • Borrowing

  • Interest

  • Revenue

  • Spending

Explanation

Question 6 of 35

1

The main purpose of taxation is to:

Select one of the following:

  • Encourage earning

  • Encourage spending

  • Fund public spending

  • Fund social enterprises

Explanation

Question 7 of 35

1

An increase in the personal allowance will mean that a taxpayer should have:

Select one of the following:

  • Less gross pay

  • Less net pay

  • More gross pay

  • More net pay

Explanation

Question 8 of 35

1

When more people are employed by businesses:

Select one of the following:

  • Less National Insurance is collected

  • More National Insurance is collected

  • More Jobseeker's Allowance is paid

  • The national debt goes up

Explanation

Question 9 of 35

1

Which of the following combinations leads to a financial 'bubble'?

Select one of the following:

  • High prices, high demand

  • High prices, low demand

  • Low prices, high demand

  • Low prices, low demand

Explanation

Question 10 of 35

1

Poor financial choices can lead to:

Select one of the following:

  • Effective planning

  • Increasing debt

  • Less spending

  • Lower interest rates

Explanation

Question 11 of 35

1

Which of the following does inflation measure?

Select one of the following:

  • Economic growth

  • Interest rates

  • The cost of borrowing

  • The rate of increase in prices

Explanation

Question 12 of 35

1

In order to measure CPI, the Office for National Statistics identifies a basket of goods and services which is:

Select one of the following:

  • Reflective of what a typical individual buys

  • Reflective of what the average household buys

  • Used by all households

  • Used by all individuals

Explanation

Question 13 of 35

1

Interest is the cost of:

Select one of the following:

  • Saving instead of spending

  • Spending instead of saving

  • Using someone else’s money

  • Using your own money

Explanation

Question 14 of 35

1

When interest rates fall, this is bad news for people with:

Select one of the following:

  • Credit cards

  • Mortgages

  • Overdrafts

  • Savings

Explanation

Question 15 of 35

1

Rapidly rising house prices most favour:

Select one of the following:

  • Home owners with no mortgage

  • People trying to buy their first home

  • Savings accounts

  • Tenants wanting to buy

Explanation

Question 16 of 35

1

A commuter belt is where people:

Select one of the following:

  • Live and usually work

  • Live, but they usually work elsewhere

  • Travel in to the countryside for work

  • Work, but they usually live elsewhere

Explanation

Question 17 of 35

1

Which of the following countries uses dollars?

Select one of the following:

  • Australia

  • Germany

  • Japan

  • United Kingdom

Explanation

Question 18 of 35

1

If the pound sterling has been strengthening against the euro then when Natalie visits France next week she will:

Select one of the following:

  • Get fewer euros for her pounds sterling

  • Get more euros for her pounds sterling

  • Get the same number of euros for her pounds sterling

  • Pay more commission

Explanation

Question 19 of 35

1

Which of the following events is certain?

Select one of the following:

  • Death

  • Divorce

  • Emigration

  • Redundancy

Explanation

Question 20 of 35

1

A 17-year-old taking A levels will usually be least concerned about:

Select one of the following:

  • Minimum-wage rates

  • Mortgage rates

  • Student loans

  • The cost of driving lessons

Explanation

Question 21 of 35

1

Case Study 1
Kyle is 17 and has been learning about the dangers of payday loans; he is shocked. He decides that he should establish good financial habits straight away.
He has a part-time job paying £40 a week, he receives £5 a week pocket money from his grandmother, and he gets a £10 weekly allowance from his parents. Kyle decides that he will restrict his spending to £20 a week in cash, and put the rest in a building society ISA. He also saves up any 50p coins he receives in change and puts these into his ISA each time he has a jar full.

Question:
Kyle's 50p coins are made by:

Select one of the following:

  • Bitcoin

  • De La Rue

  • The Bank of England

  • The Royal Mint

Explanation

Question 22 of 35

1

Case Study 1
Kyle is 17 and has been learning about the dangers of payday loans; he is shocked. He decides that he should establish good financial habits straight away.
He has a part-time job paying £40 a week, he receives £5 a week pocket money from his grandmother, and he gets a £10 weekly allowance from his parents. Kyle decides that he will restrict his spending to £20 a week in cash, and put the rest in a building society ISA. He also saves up any 50p coins he receives in change and puts these into his ISA each time he has a jar full.

Question:
Kyle's weekly earned income amounts to:

Select one of the following:

  • £40

  • £45

  • £50

  • £55

Explanation

Question 23 of 35

1

Case Study 1
Kyle is 17 and has been learning about the dangers of payday loans; he is shocked. He decides that he should establish good financial habits straight away.
He has a part-time job paying £40 a week, he receives £5 a week pocket money from his grandmother, and he gets a £10 weekly allowance from his parents. Kyle decides that he will restrict his spending to £20 a week in cash, and put the rest in a building society ISA. He also saves up any 50p coins he receives in change and puts these into his ISA each time he has a jar full.

Question:
Because Kyle places some of his income in a building society account, this means that other people are able to:

Select one of the following:

  • Borrow

  • Earn

  • Save

  • Spend

Explanation

Question 24 of 35

1

Case Study 2
Nancy rents a one-bedroomed flat in Norwich. She is an operations manager at a life insurance company in the town, earning £60,000 a year. She is about to buy her first property, a two-bedroomed semi-detached house with a small garden, which is on the market for £199,950. She is putting down a deposit of £30,000.
Nancy has worked out her budget and, although her monthly repayments will be quite high, she can afford them providing she keeps earning the same amount and does not overspend on discretionary items.

Question:
At what rate does Nancy pay income tax on her earnings?

Select one of the following:

  • Additional rate

  • Basic rate

  • Higher rate

  • Starting rate

Explanation

Question 25 of 35

1

Case Study 2
Nancy rents a one-bedroomed flat in Norwich. She is an operations manager at a life insurance company in the town, earning £60,000 a year. She is about to buy her first property, a two-bedroomed semi-detached house with a small garden, which is on the market for £199,950. She is putting down a deposit of £30,000.
Nancy has worked out her budget and, although her monthly repayments will be quite high, she can afford them providing she keeps earning the same amount and does not overspend on discretionary items.

Question:
What tax will Nancy have to pay on her property purchase?

Select one of the following:

  • Capital gains tax

  • Income tax

  • Inheritance tax

  • Stamp duty

Explanation

Question 26 of 35

1

Case Study 2
Nancy rents a one-bedroomed flat in Norwich. She is an operations manager at a life insurance company in the town, earning £60,000 a year. She is about to buy her first property, a two-bedroomed semi-detached house with a small garden, which is on the market for £199,950. She is putting down a deposit of £30,000.
Nancy has worked out her budget and, although her monthly repayments will be quite high, she can afford them providing she keeps earning the same amount and does not overspend on discretionary items.

Question:
An increase in which of the following taxes will make it harder for Nancy to meet her monthly outgoings?

Select one of the following:

  • Corporation tax

  • Income tax

  • Inheritance tax

  • Stamp duty

Explanation

Question 27 of 35

1

Case Study 3
Hollie is 16 and about to take her GCSEs. Most of her friends are going to take A levels and then go to university. Hollie is interested in engineering and her dad has been talking about the value of apprenticeships.
Her research informs her that the nearby steelworks is offering well-paid apprenticeships, leading to a degree. Hollie's mum is worried about the debt Hollie would take on by going to university. Her mum and dad will help as much as they can whatever she does, but, with two younger children, there's very little money to spare.

Question:
If Hollie takes on the apprenticeship after her GCSEs she could earn enough to pay tax and National Insurance, so she wonders why she cannot vote. What else can Hollie not do?

Select one of the following:

  • Create an e-petition online

  • Refuse to pay income tax

  • Register to vote

  • Write to her MP

Explanation

Question 28 of 35

1

Case Study 3
Hollie is 16 and about to take her GCSEs. Most of her friends are going to take A levels and then go to university. Hollie is interested in engineering and her dad has been talking about the value of apprenticeships.
Her research informs her that the nearby steelworks is offering well-paid apprenticeships, leading to a degree. Hollie's mum is worried about the debt Hollie would take on by going to university. Her mum and dad will help as much as they can whatever she does, but, with two younger children, there's very little money to spare.

Question:
The government decides how much:

Select one of the following:

  • Holiday pay Hollie will receive from her employer

  • Income protection insurance Hollie should have

  • Hollie should save from her income

  • Hollie must earn as a minimum in her apprenticeship

Explanation

Question 29 of 35

1

Case Study 3
Hollie is 16 and about to take her GCSEs. Most of her friends are going to take A levels and then go to university. Hollie is interested in engineering and her dad has been talking about the value of apprenticeships.
Her research informs her that the nearby steelworks is offering well-paid apprenticeships, leading to a degree. Hollie's mum is worried about the debt Hollie would take on by going to university. Her mum and dad will help as much as they can whatever she does, but, with two younger children, there's very little money to spare.

Question:
Hollie applies for the apprenticeship. In making this decision, the strongest influence on her personal values seems to be:

Select one of the following:

  • Her family

  • Her peer group

  • The government

  • The media

Explanation

Question 30 of 35

1

Case Study 4
Daniel is a physics teacher aged 28. He lives in a rented flat in Manchester with his girlfriend Laura, who is a nurse aged 25. They plan to buy a place of their own, get married and start a family.
They have already saved £10,000 towards a deposit and other house-buying costs, and are putting aside at least £500 per month with a building society. They have been offered a fixed-rate mortgage for 4 years at 2.5% APR. Laura has read that the UK economy is nearing its peak and that interest rates are historically low.

Question:
Over the next few years particularly, Daniel and Laura will need to avoid poor financial decision-making as:

Select one of the following:

  • Daniel's income is likely to reduce

  • Laura's financial risk will decrease

  • Their financial responsibilities are likely to increase

  • Their joint expenditure is expected to reduce

Explanation

Question 31 of 35

1

Case Study 4
Daniel is a physics teacher aged 28. He lives in a rented flat in Manchester with his girlfriend Laura, who is a nurse aged 25. They plan to buy a place of their own, get married and start a family.
They have already saved £10,000 towards a deposit and other house-buying costs, and are putting aside at least £500 per month with a building society. They have been offered a fixed-rate mortgage for 4 years at 2.5% APR. Laura has read that the UK economy is nearing its peak and that interest rates are historically low.

Question:
The mortgage Daniel and Laura have chosen means that during the next year, if interest rates:

Select one of the following:

  • Go up, they will pay less

  • Go up, they will pay more

  • Go down, they will pay less

  • Go down, they will pay the same

Explanation

Question 32 of 35

1

Case Study 4
Daniel is a physics teacher aged 28. He lives in a rented flat in Manchester with his girlfriend Laura, who is a nurse aged 25. They plan to buy a place of their own, get married and start a family.
They have already saved £10,000 towards a deposit and other house-buying costs, and are putting aside at least £500 per month with a building society. They have been offered a fixed-rate mortgage for 4 years at 2.5% APR. Laura has read that the UK economy is nearing its peak and that interest rates are historically low.

Question:
What is the next stage of the economic cycle that Daniel and Laura will experience?

Select one of the following:

  • Bubble

  • Expansion

  • Slowdown

  • Trough

Explanation

Question 33 of 35

1

Case Study 5
Claire is a student at the University of Bristol. Her monthly income is £400 and her monthly outgoings are £440. She enjoys clothes shopping with friends and has an outstanding balance on her student credit card, and a personal loan on which there is a monthly payment of £75.
Claire has a part-time job in a factory which specialises in making components for swimming pools and whirlpool baths. The majority of the factory’s parts are shipped to the United States. She earns £200 a month and, as this income is well within her personal allowance, she does not have to pay income tax on it.

Question:
Which of the following is not an effect of Claire making purchases?

Select one of the following:

  • She contributes to the income of the businesses

  • The businesses are able to pay corporation tax

  • The businesses are able to pay income tax

  • The businesses are able to pay their employees

Explanation

Question 34 of 35

1

Case Study 5
Claire is a student at the University of Bristol. Her monthly income is £400 and her monthly outgoings are £440. She enjoys clothes shopping with friends and has an outstanding balance on her student credit card, and a personal loan on which there is a monthly payment of £75.
Claire has a part-time job in a factory which specialises in making components for swimming pools and whirlpool baths. The majority of the factory’s parts are shipped to the United States. She earns £200 a month and, as this income is well within her personal allowance, she does not have to pay income tax on it.

Question:
The first thing Claire should do in terms of her finances is:

Select one of the following:

  • Make only the minimum monthly repayment on her credit card

  • Reduce her personal loan payments

  • Reduce her unnecessary spending

  • Use her overdraft facility

Explanation

Question 35 of 35

1

Case Study 5
Claire is a student at the University of Bristol. Her monthly income is £400 and her monthly outgoings are £440. She enjoys clothes shopping with friends and has an outstanding balance on her student credit card, and a personal loan on which there is a monthly payment of £75.
Claire has a part-time job in a factory which specialises in making components for swimming pools and whirlpool baths. The majority of the factory’s parts are shipped to the United States. She earns £200 a month and, as this income is well within her personal allowance, she does not have to pay income tax on it.

Question:
The factory Claire works in will find it harder to export to the United States when the:

Select one of the following:

  • Dollar is strong and the euro is strong

  • Dollar is strong and the pound sterling is weak

  • Euro is weak and the pound sterling is weak

  • Pound sterling is strong and the dollar is weak

Explanation

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