Personal finance II - JSS3 Business studies Past Questions and Answers - page 2
How do individuals adjust their budget?
By increasing income
By decreasing expenses
By ignoring financial goals
By following trends
What is the primary goal of budgeting?
To spend as much as possible
To save as little as possible
To track spending and achieve financial goals
To ignore financial goals
How can understanding the scale of preference benefit individuals in personal finance?
By increasing expenses
By decreasing income
By prioritizing financial decisions and goals
By ignoring budgeting
What does a budget surplus indicate?
Spending less than income
Spending more than income
Saving more than income
Saving less than income
Why is tracking income and expenses important in personal finance?
To spend impulsively
To ignore financial goals
To ensure financial stability and achieve goals
To increase debt
What is consumption in personal finance, and why is it important?
Consumption in personal finance refers to the spending of money on goods and services to satisfy needs and wants. It is important because it involves making choices about how to allocate limited resources to maximize satisfaction or utility.
How does understanding the scale of preference help individuals in managing their finances?
Understanding the scale of preference helps individuals prioritize their needs and wants based on importance, allowing them to allocate their resources more effectively and make informed decisions about spending and saving.
What steps are involved in preparing an individual budget?
Preparing an individual budget involves estimating income from various sources, listing all expenses including fixed and variable costs, savings goals, and comparing income with expenses to ensure financial stability and meet financial goals.
What are fixed costs and variable expenses in a budget, and how do they differ?
Fixed costs are expenses that remain constant over time, such as rent or mortgage payments, while variable expenses fluctuate based on usage or consumption, like groceries or utilities.
What is a budget deficit, and how can individuals address it?
A budget deficit occurs when expenses exceed income. Individuals can address it by reducing discretionary spending, finding ways to increase income, or reallocating resources to meet essential needs first.