Chapter Assessment - Financial Literacy - أول ثانوي

وزارة التعليم 106 Financial Literacy Chapter 3 Assessment SUMMARY 3.1 ⚫ Inflation is an increase in the general price levels of goods and services and is measured by the Consumer Price Index (CPI), Inflation reduces purchasing power. • CPI is a measure of the average change in prices paid by a typical family over a period of time for a basket of goods and services. • Inflation affects the purchasing power of money, which falls as inflation rises. ⚫ Gross domestic product (GDP) is a common measure of a country's economic performance and includes the production of new goods and services, government spending, and exports 3.2. Budgeting is a critical part of making good financial choices. It allows you to analyze what you are spending and saying, and make changes as needed. • Budgeting is a four-step process where you estimate income, esti- mate expenses, plan savings, and balance the budget. ⚫ A variance is the difference between a planned amount and the actual amount of an income or expense item in your budget. Ana lyzing your variances will help you plan spending and saving better in the future. . 3.3 Manual and electronic record-keeping methods will help you stay organized and prepare better financial records. Electronic methods have various advantages over manual methods. ⚫ Passwords help to protect your information and keep it safe from fraud. 3.4 ⚫ Financial planning involves examining your current financial situa tion and thinking about your future. It also involves creating a finan- cial plan that contains goals, targets, and timelines. Five steps in financial planning are (1) gather information, (2) analyze information, (3) set goals, (4) develop a timeline and targets, and (5) implement and evaluate the plan.

KEY TERMS For each lesson, match the terms listed with their definitions. Write the letters of the correct definitions. Lesson 3.1 Term Your choice Definition 1 Backet of goods a the price that customers pay for goods in stores and services. 2 Consumer Price Index (CTI) 3 Inflation 4 Purchasing power 5 Retail price 6 Time value of money! Lesson 3.2 b an increase in the general level of prices for goods and services The value of money, measured by the amount of goods and services it can buy d measures the average change in prices paid by consumers over a period of time for a basket of goods and services e a concept that says a Riyal you receive in the future will be worth less than a Riyal you receive In the present (today) represents a typical family's spending and is used to measure CPI Term 1 Chantable giving 2 Tried expenses 3 Mortgage 4 Variable expenses 5 Variances Your choice Definition a an agreement to borrow money with your house as security for the borrowed money b. the act of donating to a nonpuurit organization to help it accomplish is goals tramed out through official agencies in Saudi Arabia, in line with national regulations) the differences between planned amounts, and artus! amounts d costs that do not change each month e costs that can go up and down each month Lesson 3.3 Term Atronic records Magual repar 3 Spreadsheet Your choice Definition a compule program that allow you to insert number and formulas to compute amounts, and then easily change them later as needed b soft-copy formats of your financial information stored on your computer information recorded in hard-copy format using ben and ارة التعليم 4127-1985 paper CHAPTER 3 Assessment 107

Lesson 3.4 Term 1 Financial goaly 2. Financial plan 3 temediate quals 4 Long-term goals 5 Pension 6 Personal goals Your choice Definition a things you want to achieve in your life b things you expect to achieve within one week to one year cavegular income part to people over the remement age d a set of personal and financial goals along with steps and a timeline for reaching them e things you want to achieve more than live year from now f a visual display of how long it will take to achieve each phase of a plan 7 Short-term goals g plans for how you will pay for your personal goals 8 Timeline h things you wish to achieve in the next two to five years درارة النص البحر 108 Financial Literacy PROBLEMS 1. What is inflation? 2. What is purchasing power? How is it affected by inflation? 3. What is gross domestic product? Why is it a good idea to compare it over several years?

4. What is a budget? Why might you update it monthly? 5. Why is the first step (Estimate Income) in preparing a budget so important? 6. What are fixed expenses? How are they different from variable expenses? 7. Why is it important that a budget is balanced? 8. If your budget does not balance, what can you do to bring it into balance? وزارة التعليم 27-1985 CHAPTER Assessment 109

وزارة التعليم 110 Financial Literacy 9. Why is a good record keeping system important? 10. What is the purpose of a financial plan? 11. Explain one type of information or document that should be gath- ered as the first step in creating a financial plan. 12. What is the difference between short-term, intermediate, and long- term goals?

EXERCISES Choose the correct answer. 1. Your standard of living will increase if: a. your pay rise is equal to the inflation rate b. your pay rise is higher than the inflation rate c. your pay rise is lower than the inflation rate d. you do not have a pay rise 2. Inflation decreases the general level of prices for goods and services. a. true b. false 3. When GDP grows, there are generally more jobs available. a. true b. false 4. A budget shows how much money you earned last year. a. true b. false 5. Which of the following is a budget NOT needed for? a. paying current expenses b. paying past expenses c. planned medium-term purchases d. pensions 6. Which of the following is NOT an expense? a. clothes and shows b. lunches c. mobile phone bill d. allowance 7. Manual records are usually kept on computers. a. true b. false An advantage of electronic records is: وزارة التعليم CHAPTER Assessment 111

وزارة التعليم 112 Financial Literacy a. they can be damaged by fire b. they use lots of space c. it is hard to make neat changes d. the speed at which comparisons can be made 9. Math errors are eliminated due to formulas in spreadsheets. a. true b. false 10. Which of the following is a potential financial goal? a. to get into debt b. to have no income c. to save for a car d. to spend all your money 11. Personal goals are how you will pay for your financial goals. a. true b. false 12. Which of the following is NOT a financial document used to assess your finances? a. a bank statement b. a will c. a birth certificate d. an insurance policy

حليم MINI CASE Yasser's Vehicle Leasing Business Abdullah, the manager in Riyadh, has been working for Yasser's vehicle leasing business for one year and has been very busy. He has been living in a small apartment which is very cheap. Abdullah has enjoyed an active social life and always buys the latest technology. He recently visited a friend who lives in a luxury apartment and began to think about his own future and finances. 1. Abdullah wants to begin planning his future finances. Should Abdullah create a personal budget? Explain why a budget would or would not be helpful for him. 2. Abdullah has decided to keep good records of his spending. Recommend whether Abdullah should use manual or electronic records. Abdullah has decided that he wants to buy an apartment. He has done some research and thinks that he will need to make a down payment of SAR 100,000 if he bought the apartment today. He thinks he will be able to save SAR 100,000 in five years. 3. Will saving SAR 100,000 in five years be enough for a down pay- ment? Explain the impact of inflation on Abdullah's target? 127-1489 CHAPTER Assessment 113