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Business Unit 1
| Question | Answer |
|---|---|
| What is a need? | Essential items for survival and well-being |
| What is a want? | Non-essential items that provide comfort or enjoyment |
| What is income? | Money received from work, investments, or government payments |
| What is a consumer? | A person who buys goods or services for personal use |
| What is financial literacy? | Financial literacy is the ability to understand and use financial skills such as budgeting, investing, and money management effectively. |
| What are personal values? | Personal values are beliefs or principles that guide what a person thinks is important. E.g. Saving goals, attitude towards debt |
| What is income? | Income is money a person receives, usually on a regular basis, for working, owning assets, or through government support. |
| What is a wage? | Wages are income paid based on the number of hours worked. E.g. Retail workers at Kmart |
| What is a salary? | Salary is a fixed annual amount paid to an employee regardless of hours worked. E.g. Teachers |
| What is Commission ? | Commission is income earned as a percentage of sales or performance. |
| What is a Government Payment? | Government payments are income provided by the Australian Government to support eligible individuals. |
| What is PACED model? | It is used to compare choices fairly and logically before spending money. P – Problem A – Alternatives C – Criteria E – Evaluate D – Decide |
| What do people used the PACED model? | Model breaks down a decision into clear steps as it helps focus on facts, criteria, and comparisons. Prevents overspending or choosing product that doesn’t meet your needs. Prevents impulse buying. |
| What is a consumer guarantee? | Consumer Guarantees are the legal promises businesses must meet when selling goods or services. They ensure that products must be safe, of acceptable quality, fit for purpose, and match their description. |
| What are consumer rights? | Consumer rights are the legal protections under the Australian Consumer Law that ensure consumers are treated fairly when buying goods and services, and allow them to receive a repair, replacement, or refund if something goes wrong. |
| What is a warranty? | Warranties are promises made by a store or manufacturer to repair or replace a product within a specified time frame, but they do not override consumer guarantees. |
| What is a refund? | A refund is the return of money to a consumer when goods or services do not meet legal requirements. |
| What are some consumer responsibilities? | Keep receipts or proof of purchase Use the product correctly Report issues within a reasonable time Not misuse or damage items Be honest and reasonable when making claims |
| What is a scam? | A scam is a dishonest attempt to trick someone into giving away money, personal information or access to their accounts. |
| What are some types of scams? | 1. Emotional scams - targets feelings 2. Financial opportunity scam - promises fast profits and returns 3. Information scams - steals information from clients like phishing emails |
| How to avoid being scammed? | 1. Be suspicious and cautious on random emails 2. Be alert and aways double check bank accounts and unexplained transactions 3. Strong passwords |
| What is a bank? | Banks are financial institutions that offer a wide range of financial services to all participants in the Australian economy |
| What is a credit union? | Credit unions provide a range of products and services that are similar to those offered by banks. These include accepting deposits, offering personal and home loans, and providing payment services such as credit cards. |
| What are some similarities between banks and credit unions? | 1. Provides access to financial services such as depositing money. 2. Provides access to loans |
| What are some differences between banks and credit unions? | 1. Credit unions owned by shareholders vs. banks owned by shareholders 2. Bank aim to make high profit. Credit Unions aim to support its members. 3. Bank - anyone can join. Credit Unions - eligible members only |
| What is simple interest? | principal x rate x time -------------------------- 100 |
| What are the different levels of investments? | Low risk Medium risk High risk |
| What is investments? | Investing means using money to buy something (like shares or property) that is expected to increase in value or earn income over time. |
| what is a low risk investment? | safe grows slowly returns are predictable |
| What is a medium risk investment? | Medium‑risk investments have some ups and downs, but not as extreme as high‑risk investments. Moderate chance of losing money in the short term More growth potential over time |
| What is a high risk investment? | Very unpredictable Can lose value quickly Potential for high rewards Strong emotional impact (stress/excitement) |
| What are types of investments? | Shares Crypto Managed Funds Term Deposits |
| What is a share? | A share is a unit of ownership in a company. When you buy a share, you become a part-owner (shareholder) of that company. |
| What is a term deposit? | A fixed-term deposit account is a good option for storing large sums of money. |
| What is a managed fund? | An investment where many investors pool their money together, and a professional fund manager invests that money on their behalf in a mix of assets, like shares, bonds, property, or other securities. |
| What is superannuation? | Superannuation is a long-term investment that grows over time. It is a person’s retirement savings that is managed by a fund and accumulates over time. |
| What is the purpose of superannuation? | Purpose = To address the needs of the rising ageing population in Australia. |
| What is the current rate for super? | 12% |
| What is the age pension? | designed to provide a ‘safety net’ for people who do not have enough superannuation or other financial resources to |
| What is a superfund? | Superfund is the fund that an employee selects for their superannuation contributions to be paid into. |
| What do you need to consider when selecting a superfund? | Investment performance Annual Fees Insurance Net return Is it a restricted fund? |
| What is single diversified strategy? | A “mix” of different types of investments |
| What is net return? | The return after fees and taxes have been taken out = profit that you have made. |
| What is investment performance? | A measure of how well the super fund’s investments have grown. |
| What is an insurance? | Insurance is a financial product that protects people from financial loss. |
| Why do people get an insurance? | To protect themselves from large unexpected costs For financial security and peace of mind To meet legal requirements To protect valuables To protect their health and family |
| What are the different types of insurances? | Car insurance Travel Insurance Health Insurance Pet Insurance Home Insurance |
| What are some advantages of a car insurance? | Covers repair or replacement costs after an accident Protects you financially if you damage someone else’s car/property |
| What are some disadvantages of a car insurance? | Can be expensive, especially for young drivers Excess must be paid when making a claim |
| What are some advantages of a travel insurance? | Covers cancellations, lost luggage and medical emergencies overseas Protects against high overseas medical costs |
| What are some disadvantages of a travel insurance? | Riskier activities may be excluded Claims require documentation |
| What are some advantages of a health insurance? | Shorter wait times for surgeries Covers dental, optical, physio, hospital costs (depends on cover) |
| What are some disadvantages of a health insurance? | Can be expensive Complex policies can be confusing |
| Command Term: Discuss | Advantages and disadvantages |
| Command Term: Compare | Similarities and differences |
| Command Term: Distinguish | What is the difference? Must include - whereas/however/in comparison |
| Command Term: Explain | How/Why -> and the result |
| Command Term: Identify | List |
| Command Term: Describe | Reason/point + add detail |
| Command Term: Justify | Give your reason and explain why it is the best solution |
| Do I need to include working out in Business? | Yes. Always show working out. |
| What does KLIC stand for | Key Knowledge - What is the question about? Limiting Factor - What is the mark allocation? Information - Do I need to include any case study information in my answer? C - Command Terms |
| What do I do if the question says "Make references to the case study in your answer"? | Directly quote and refer back to the case study in your answer. E.g. This can be seen in the (statistic/data/number) where (describe) E.g. This can be seen when (include details from case study relevant to your answer) |
| Command Term: Outline | List |
| Command Term: Define | Provide definition |
| If the question is about a type of investment what do I do? E.g. What is superannuation? | Always include what level of risk the investment in your response. E.g. Superannuation is a medium risk investment ..... |
Created by:
Miss JM