Instructions to learners

Transcription

1 ifs Level 2 ward in Financial Education (ife) 601 / 6360 / 4 ifs Level 2 ertificate in Financial Education (efe) 601 / 1239 / 6 Unit 1 Finance, the Individual and Society (FIS) R / 505 / 4681 Specimen paper: Length of examination: 45 minutes Instructions to learners 1. Open this question paper when instructed to do so. 2. nswer all questions. 3. Use the examination answer sheets provided for your answers. Please do not note your answers in this booklet, as they will not be recorded. 4. Read the instructions on both sides of the answer sheet carefully. 5. efore you leave the examination room you must hand in all the examination materials including the answer sheet and question paper. Information for learners 1. Silent non-programmable (including scientific) calculators are allowed. Programmable calculators are not allowed. ifs University ollege is a registered charity, incorporated by Royal harter. This qualification is accredited by the regulatory authorities for England, Wales, Northern Ireland and Scotland and is incorporated into the Qualifications and redit Framework (QF) at Level 2

2 ife / efe unit 1 Finance, the Individual and Society Specimen Paper Section 1. Who out of the following would not be a UK citizen? aniel, born in England to English parents. orota, born in Poland and moved to England two years ago. Eve, born in New Zealand but has passed the 'life in the UK' test. Katie, born in ermuda to Scottish parents. 2. The government decides how much: benefit caps are. electricity will cost. people should save. rents will cost. 3. anknotes must not be: easily counterfeited. easily recognised. hard-wearing. portable. 4. Gross pay is: pay after tax. pay before tax. pay before tax and National Insurance. pay after tax and National Insurance. Page 2 of 11 Specimen/FIS

3 ife / efe unit 1 Finance, the Individual and Society Specimen Paper 5. Taxes are: compulsory payments. contributory payments. optional payments. voluntary payments. 6. Income tax is an example of a tax which is: direct and flat rate. direct and variable rate. indirect and flat rate. indirect and variable rate. 7. n increase in which of the following taxes would impact on the price paid for a new car? orporation tax. Fuel duty. Road tax. Value added tax. 8. harities benefit the economy mainly because they: have volunteers. help companies with SR. reduce social justice. reduce the need for public spending. Page 3 of 11 Specimen/FIS Turn over

4 ife / efe unit 1 Finance, the Individual and Society Specimen Paper 9. Reading and understanding the small print is one aspect of: choosing financial products wisely. keeping track of personal finances. planning ahead. staying within a budget. 10. dults who do not adequately save for retirement may become dependent on: government benefits. income tax. National Insurance. Premium onds. 11. Inflation measures the increase in: exchange rates. interest rates. the prices of goods and services. the rates of taxation. 12. If the savings rate is 4% and the inflation rate 2%, by how much will money grow in real terms? 0%. 2%. 4%. 6%. Page 4 of 11 Specimen/FIS

5 ife / efe unit 1 Finance, the Individual and Society Specimen Paper 13. The interest charged on overdrafts is known as the: ER. PR. ER. NIS. 14. Interest rewards: borrowers. employees. employers. savers. 15. If a customer receives a real return of 5% and inflation is running at 3%, what nominal return have they received? 2%. 3%. 5%. 8%. 16. Which of the following has the government put forward as a potential solution to the issue of funding the retirements of an ageing population? Increasing the retirement age. Lower levels of immigration. Lower taxes. Reducing the retirement age. Page 5 of 11 Specimen/FIS Turn over

6 ife / efe unit 1 Finance, the Individual and Society Specimen Paper 17. If the exchange rate is 1 GP = 1.21 euros, how many euros can you get for 150? If the pound sterling has been weakening against the dollar, then when Kim visits New York next week she will: find it harder to find a company willing to exchange her pounds for dollars. get fewer dollars for her pound sterling. get more dollars for her pound sterling. get the same number of dollars for her pound sterling year-old will generally be most interested in the: cost of their mobile phone contract. interest rate on their savings. minimum wage for apprentices. money they might get on their birthday. 20. Someone in retirement is less likely to take financial risks than a young adult because they: have fewer options to earn back any losses. have greater outgoings than younger people. have more financial responsibilities than younger people. tend to have more debt than younger people. Page 6 of 11 Specimen/FIS

7 ife / efe unit 1 Finance, the Individual and Society Specimen Paper ase Study 1 Nic is aged 16 and has just started working towards his levels. His favourite subject is business studies; in this week s lessons he has been learning about the different types of economies that exist in the world today. He takes good care of the money he receives and is currently saving up for driving lessons so that he can start taking them as soon as he turns 17. Nic earns 30 a week from a part-time weekend job washing dishes in a local café. His parents give him an allowance of 40 a month. He recently inherited 500 after the death of his aunt, and he has a 20 note left over from the money he received for his birthday. 21. The 20 note Nic received was manufactured by: itcoin. e La Rue. the ank of England. the Royal Mint. 22. Which of the following is a source of earned income for Nic? His: allowance. birthday present. inheritance. part-time wages. 23. uring Nic's business studies course he has learned that the UK is a: command economy. communist economy. free market economy. mixed economy. Page 7 of 11 Specimen/FIS Turn over

8 ife / efe unit 1 Finance, the Individual and Society Specimen Paper ase Study 2 Saira earns 250,000 working for a very profitable private firm of bankers. She has three children. Her son ryn, aged 20, who works in a second-hand bookshop, has just been given his first car. The other children both attend private school and the fees total 30,000 a year. Saira has a large mortgage and spends a great deal each month to maintain the lifestyle she and her children have come to enjoy. She is concerned that high earners will be asked to pay more tax if there is a change of government at the next election and that this will impact on her ability to afford her lifestyle. 24. What tax does Saira's employer pay on the profits it makes? apital gains tax. orporation tax. Income tax. Inheritance tax. 25. What tax will ryn have to start paying now he is a car owner? apital gains tax. orporation tax. Value added tax. Vehicle excise duty. 26. Which of the following changes in tax bands would Saira be most concerned about? dditional rate. asic rate. Higher rate. Personal allowance. Page 8 of 11 Specimen/FIS

9 ife / efe unit 1 Finance, the Individual and Society Specimen Paper ase Study 3 illon has just started his first year at university. He is studying politics at Swansea. illon has been brought up to be careful with his money. ecause his parents are low earners, illon receives a cost-of-living grant worth around 5,000 a year. He feels that these measures made it possible for him to attend university, and he is the first in his family to do so. He wants to make his parents proud and so is currently working hard on his first assignment, which is to research the history of democratic rule. 27. s illon finds out in his research, democratic rule means rule by the: government. parliament. people. queen. 28. illon also learns that Wales is responsible for setting its own policies in which of the following areas? enefits. Education. Employment. Tax. 29. The decisions illon makes about his finances are most influenced by: his family. his student friends. the government. the media. Page 9 of 11 Specimen/FIS Turn over

10 ife / efe unit 1 Finance, the Individual and Society Specimen Paper ase Study 4 ean has a variable rate mortgage. lthough he has managed to keep up with his monthly repayments, he is concerned about how he will manage this if interest rates rise in the near future. In addition to his mortgage, ean has a fixed-rate personal loan and an outstanding balance on his credit card and store card. He is managing to keep up his repayments, but this leaves him with no money left over at the end of the month to set aside for emergencies or to meet any other financial needs. 30. ecause of ean's high levels of debt he has less money for his wants and needs. This is due to him having less: disposable income. gross income. net income. taxable income. 31. Which one of ean's borrowing products will not become more expensive in the event of an interest rate rise? His: credit card. mortgage. personal loan. store card. 32. Which of the following facts about inflation is true for ean? hanges in the rate of inflation will increase his monthly repayments. hanges in the rate of inflation will reduce his monthly repayments. High inflation increases the value of his debts in real terms. High inflation reduces the value of his debts in real terms. Page 10 of 11 Specimen/FIS

11 efe unit 1 Finance, the Individual and Society Specimen Paper ase Study 5 evlin has been employed in the third sector for five years now, travelling up and down the UK training volunteers to fundraise. He has done so well that he has won the organisation s top prize at their annual awards ceremony. The prize is a return flight to the Indian capital of New elhi to see how the funds raised by the organisation are put to use. evlin has to pay for the rest of his expenses and, as he already has very little in the way of disposable income, he has chosen to stay in the cheapest hotel from the recommended list. 33. evlin describes himself as working in the 'third sector'. This means that he is working for a: charity. nationalised industry. private company. public company. 34. evlin's choice of hotel is an example of him: keeping track of personal finance. making informed choices. planning ahead. Staying within a budget. 35. If the pound sterling strengthens against the Indian rupee then: evlin will be able to buy fewer rupees for his pound sterling. evlin will be able to buy more rupees for his pound sterling. fewer people will buy imports from India. the funds raised will go further when converted into rupees. Page 11 of 11 Specimen/FIS