Income Types and Expenditure Patterns
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Questions and Answers

What is considered non-financial income?

  • Investing in stocks
  • Growing your own vegetables (correct)
  • Receiving a salary from work
  • Selling goods at a market
  • Which income group is most likely to spend primarily on basic necessities?

  • Low income groups (correct)
  • Middle-high income groups
  • Middle income groups
  • High income groups
  • How does the age of individuals affect their expenditure patterns?

  • Middle-aged individuals tend to buy fewer luxury items.
  • Younger individuals save more money for retirement.
  • Young people may spend more on electronics and entertainment. (correct)
  • Older adults primarily invest in property.
  • What can influence a household's expenditure patterns?

    <p>The number of family members</p> Signup and view all the answers

    Which demographic is likely to spend more on vacations?

    <p>Families whose children have left home</p> Signup and view all the answers

    What is likely to happen to spending patterns during periods of high inflation?

    <p>People have less disposable income leading to decreased spending on luxury items.</p> Signup and view all the answers

    How does residential area affect household spending?

    <p>Expensive areas require more money for luxury goods.</p> Signup and view all the answers

    Which factor is least likely to influence expenditure patterns of individuals?

    <p>Purchasing habits of local wildlife</p> Signup and view all the answers

    Study Notes

    Income Types

    • Non-financial income: Refers to goods or services a household receives without exchanging money. Examples include self-performed tasks (e.g., home repairs), self-produced goods (e.g., vegetables), and received benefits (e.g., free food, accommodation).

    • Financial income: Refers to the money (in South African Rand) a person or household receives within a specific period (e.g., monthly, weekly).

    Expenditure Patterns

    • Factors influencing expenditure patterns:

      • Socio-economic Position:

        • Low income groups primarily spend on basic necessities.
        • Middle income groups have more disposable income for food, education, housing, and lifestyle improvements.
        • Middle-high income groups allocate more spending to luxury goods and services.
        • **High income groups ** indulge in wants and ultra-luxury items.
      • Household Type and Family Cycle:

        • Families with children dedicate a significant portion of their income to school fees, coaching, transport, and activities.
        • Families with grown children have more discretionary income for personal interests, like travel and hobbies.
        • Young independent individuals prioritize spending on entertainment and hobbies.
      • Age:

        • Individuals aged 20-24 may spend more on electronics, home appliances, and entertainment.
        • Individuals aged 45-48 might allocate more funds for vacations.
      • Peer Pressure and Media Influence:

        • Both peer groups and media exert an influence on how different age groups spend their money.
      • Other Factors:

        • Cultural/Population Groups: Cultural and religious practices affect the types of products and services people choose.
        • Residential Area: The cost of living in a specific area influences spending patterns. For instance, expensive areas have higher costs for property tax, home insurance, and maintenance.
        • Inflation: Rising inflation reduces purchasing power, leading to decreased spending on luxury items.

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    Description

    Explore the differences between non-financial and financial income, and understand how socio-economic position and household type influence expenditure patterns. This quiz covers key concepts related to household income and spending behaviors.

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