G7 Term 1 CES module 1.3 key point 1-2 (T/F)

Different Uses of Money

• Spending money on goods and services is called consumption.
• Setting aside a portion of income for future spending is called saving.
• Investing money into tools like stocks and bonds is known as investment.
• Contributing money to charities or those in need is called donation.

Setting Priorities and Budgeting

• Needs are essential for basic living.
• Wants are not essential and may be considered luxuries.
• Rational consumption involves purchasing necessary items first and optional items only if there are funds remaining
• Overspending means spending beyond one's means and without spare funds.
• A proper budget should allocate income for spending, savings, and potential loan repayments.
• Budget Formula: Income - Savings = Expenditure

Borrowing Responsibilities, Costs, and Risks

• The amount of money loaned is referred to as the principal.
• The return the lender receives is the interest.
• The borrowing period indicates the time frame within which the borrower needs to repay the principal and interest.
• Not repaying debts on time can negatively impact credit scores and potentially lead to bankruptcy or stress.

General Financial Services

• Deposits involve placing funds in a bank account with potential interest earnings.
• Loans involve borrowing money and paying back over time with interest.
• Insurance provides financial protection against unexpected events.
• Investments aim to grow wealth over the long term.

Investment Risks and Returns

• The goal of investing is to generate returns, leading to an increase in wealth.
• Risk refers to the possibility that the actual return may be different from what was anticipated.
• Higher risk investments typically offer higher potential returns.
• Investment fraud tactics can be used to deceive individuals into making unwise investments.

Online Shopping Precautions

• Online scams can occur on unreliable websites, leading to loss of money or personal information.
• Personal data leaks or thefts can pose security risks.
• Mismatched products can lead to disappointment and potential monetary loss.
• Overspending and debt can arise from impulsive online purchases.

Coping Strategies for Online Shopping Risks

• Use trusted online shopping platforms for product information and purchases.
• Use secure payment methods to protect financial data.
• Protect personal data and avoid sharing sensitive information.
• Carefully review online purchase terms and conditions.
• Maintain awareness and avoid online shopping addiction.

Intellectual Property Rights

• Intellectual property rights encompass trademarks, copyrights, patents, and more.
• Counterfeit goods and infringing works are examples of online shopping intellectual property violations.

Combating Online Shopping Crimes

• Online shopping-related crimes can negatively impact both individuals and society.
• Criminal activity related to online shopping may include fraud and scams, data breaches, and intellectual property infringement.

Consumer Responsibilities in Online Shopping

• Enhance cybersecurity knowledge to protect oneself from online threats
• Implement network security measures
• Be mindful of legal boundaries and avoid unknowingly breaking them

Key Vocabulary

• Investing involves putting money into assets with the expectation of future returns.
• Spending refers to using money on goods and services, and overspending occurs when it exceeds affordability or needs.
• Principal represents the initial amount of money borrowed.
• Interest refers to the cost of borrowing money, paid by the borrower to the lender.
• Interest Rate is the percentage at which interest is calculated.
• Borrowing Period defines the duration of a loan.
• Accumulated Amount is the total amount owed by the borrower, including principal and interest.
• Compound Interest is calculated on both the principal and the accumulated interest.
• Dividend is the return for owning a company's stock or share.
• Inflation is a general increase in prices over time.
• Intellectual Property refers to intangible rights protecting creations like inventions or artistic works.
• Return is the profit or gain resulting from an investment.
• Risk is the possibility of loss or an unfavorable outcome.
• Cybersecurity encompasses measures to protect computer systems and networks from unauthorized access or damage.

Credit Cards

• Credit cards are non-cash payment systems that allow users to make purchases and pay later.
• Using a credit card involves borrowing money from the issuing company.

Risks Associated with Debt Inability

• Lower credit scores negatively impact future borrowing opportunities.
• Bankruptcy occurs when an individual cannot repay outstanding debts.
• Stress can arise from financial burdens and difficulty managing debt.

Borrowing Considerations

• Analyze the reason for borrowing and ensure it's reasonable and necessary.
• Assess available alternatives before deciding to borrow.
• Evaluate the risk of late repayments and ensure you can manage it.
• Determine if the borrowed amount is suitable and aligned with your financial capacity.

General Financial Services by Institutions

• Deposit services offer various types of accounts for saving and earning interest.
• Loan services provide access to different loan products for individuals and businesses.
• Insurance services offer protection against various risks, like life, health, and property.
• Investment services help manage and grow wealth through different investment options.

Deposit Services

• Savings Deposits (活期存款): These deposits allow for flexible withdrawals at any time with relatively low-interest rates.

• Time Deposits: These deposits require a predetermined holding period to be withdrawn, offering higher interest rates in return.

Loan Services

• Credit card lending allows for purchases and repayments over time.
• Personal loans provide funds for various purposes, with repayment schedules based on the borrowed amount and terms.
• Mortgages are used to finance the purchase of real estate through long-term loans.
• Overdrafts allow withdrawals exceeding account balances, often with a fee.

Insurance Services

• Life Insurance protects beneficiaries in the case of the policyholder's death.
• Medical Insurance covers various medical expenses.
• Accident Insurance provides compensation for injuries caused by accidents.
• Travel Insurance covers medical expenses, trip cancellation, and other travel-related issues.
• Home Insurance safeguards against damages to residential property.
• Critical Illness Insurance provides a lump sum payment in case of serious illnesses.

Investment Services

• Stocks represent ownership shares in a company.
• Bonds represent debt securities issued by companies or government entities.

This quiz explores fundamental concepts related to finance and consumption, including budgeting, saving, and the implications of online shopping. Test your understanding of essential financial practices and the impact of spending habits on personal finance. Ideal for students learning about economic principles and personal finance management.