This topic connects what money does, who holds and moves it, where a household’s income comes from, and how a budget spends it. Seen together, the four parts tell one story.
It belongs to the SPM Economics learning guide. The lessons build in the order below.
What does the topic cover?
You need four skills:
- Explaining the functions of money.
- Comparing the roles of financial institutions.
- Distinguishing the sources of personal income.
- Reading a budget using the figures supplied.
One household to follow through the topic
A household in an invented town earns RM4 940 in a month: a salary of RM3 800, RM600 rent from a spare room, RM40 bank interest and RM500 profit from a small business. It keeps part of the money in a bank and plans the rest in a budget.
Each step uses a part of the topic. Paying bills is a function of money, and the bank holding the savings shows a financial institution’s role.
The four income streams are sources of income, and the plan for the month is a budget. The lessons below take each step in turn, using different numbers.
In what order should I study it?
- Explaining the functions of money gives you the base vocabulary.
- Comparing roles of financial institutions shows who holds and moves the money.
- Distinguishing sources of personal income sorts where the money comes from.
- Interpreting a budget using supplied figures uses all three in a calculation.
Then test the set with the money, banking and income practice.
Who should start where?
If you are new to Economics in Form 4, begin at lesson 1 and go in order. If you can already define money but mix up banks, begin at lesson 2. If you lose marks on budget figures, go to lesson 4 and work backwards to lesson 3.
Scarcity and choice sit behind budgets, because a budget is a decision about limited money. A quick look at economic scarcity and choice helps if that link is new.
For guided help, see online one-to-one Economics tuition.