BS exam scope

• Money


  Any commodity that can be used to purchase goods and services
• Forms of money


  • Cash
  • Bank deposits (savings accounts)
  • Central bank issued currency
• Money


  • Must be strong and durable (not easily broken)
  • Generally acceptable
  • Divisible
  • Uniform
  • Limited in supply
  • Portable
• Role of central bank

  1. Issues notes and coins

  2. Acts as the government's bank

  3. Manages public sector debt

  4. Acts as the bankers' bank

  5. Monitors the activities of commercial banks

  6. Lender of last resort
• Commercial banks


  • Provide financial services for small businesses and individuals
  • Accept deposits
  • Make personal and commercial loans
  • Sell insurance
  • Provide financial and tax planning advice
  • Exchange foreign currencies
• Income


  Can be earned from interest, dividends, and profit
• Disposable income


  The income a person has left after tax
• Spending patterns of different income groups

  • Low income group: Spend on necessities, low savings, high borrowing
  • Middle income group: Spend on capital goods and mortgages, moderate savings, low borrowing
  • High income group: Spend on luxury items, high savings, low borrowing
• Wealth


  Measured by the amount of assets a household owns minus liabilities
• Increased interest rates


  Positive effect on savings, negative effect on borrowing
• Economic growth


  Increased spending, increased savings
• Inflation


  Increased spending, decreased savings, increased borrowing
• Factors influencing household savings

  • Age
  • Attitude towards savings
  • Consumer and business confidence
  • Interest rates
  • Income levels
• Reasons for borrowing


  • To fund expensive items
  • To fund education
  • To purchase properties
  • To start a business
• Factors influencing borrowing


  • Interest rates
  • Income levels
  • Availability of funds
  • Credit cards
  • Store cards
  • Wealth
• Wage factors


  • Wages (time/piece rate)
  • Salary
  • Commission
  • Bonus
  • Profit-related pay
  • Share options
• Non-wage factors


  • Level of challenge
  • Career prospects
  • Level of danger involved
  • Length of training required
  • Level of education required
  • Recognition in the job
• Factors Affecting An Individual's Choice Of Occupation

  • Wage factors
  • Non-wage factors
• Wage factors


  Refers to the financial rewards that workers receive in return for their labors
• Types of financial rewards

  • Wages (time /piece rate)
  • Salary (fixed rate)
  • Commission (based on sales)
  • Bonus (based on performance)
  • Profit-related (based on company profits)
  • Share options (for long service workers)
• Fringe benefits


  Additional benefits, which have monetary value
• Non-wage factors


  • Level of challenge
  • Career prospects
  • Level of danger involved
  • Length of training required
  • Level of education required
  • Recognition in the job
  • Personal satisfaction gained from the job
  • Level of expertise required
• Wage Determination


  Interaction of the demand for labour and the supply of workers
• Demand for workers


  The number of workers that firms are willing to/able to hire
• Supply of workers


  How many workers want to apply for the job
• Factors that influence the demand for labour

  • Level of total demand in an economy
  • Productivity of labour
• Backward-bending Supply of Labour Curve

  The supply of labour decreases as wages increase beyond a certain point
• Trade Union


  An organisation/association formed by groups of workers to protect the worker interest on behalf of their members
• How a trade union helps workers

  1. Negotiates with the employer

  2. Organises protests if employer refuses to negotiate
• Factors affecting the likelihood of a successful trade union

  • Age and experience
  • Level of education
  • Earnings
• A trade union is an association formed by workers to protect their interests and improve their working conditions
• Types of trade unions

  • Craft unions (for specific industries)
  • Industrial unions (for whole industries)
  • White collar unions (for non-industrial professionals)
  • General unions (for all workers)
• Functions of trade unions

  • Negotiating improvements in wages and other benefits
  • Defending employee rights
  • Improving working conditions
  • Taking industrial action
• Types of industrial action

  • Strike
  • Work-to-rule
  • Go-slow
  • Sit-in
• Reasons for high trade union membership

  • Growth in manufacturing jobs
  • Widening wealth gap
  • High cost of living
• Reasons for declining trade union membership

  • Growth in part-time employment
  • Decline in manufacturing jobs
  • Increase in unemployment
• Advantages of trade unions

  • Improve communication between employers and workers
  • Negotiate for better pay and conditions
  • Help reduce conflict and improve industrial relations
• Disadvantages of trade unions

  • Can cause disruption and productivity losses
  • Increase firm's production costs
  • Reduce profits and government tax revenue