Pyramid scheme

High school (ages 12+)
People & Society

Name:

Date:

Step 1 · Read the article

Open the article and read it at the level above. Then answer the questions below in your own words.

https://smallwhale.org/articles/pyramid-scheme

Write what each word means, using the article.

Do not copy the article. Write two things you learned, the way you would explain them to a friend.

Answers below are taken from the article’s stored facts, so they match what the student read.

1. What is a pyramid scheme?A pyramid scheme is a trick where people pay to join and earn money mainly by bringing in new members instead of selling real products. The early members can make money from the fees of later members, but it doesn't last.
2. Why do pyramid schemes promise quick money?They promise quick money because they say you can earn a lot by recruiting friends, but they don't actually sell a real product. The idea sounds easy and exciting, so many people try it.

Ponzi Scheme: A fraudulent investment operation that pays returns to earlier investors with money taken from later investors.
Legitimate Business: An enterprise that generates revenue through the sale of products or services to actual customers.
Financial Literacy: The knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.