Recent regulatory guidelines from financial authorities have introduced significantly more stringent affordability checks on consumer credit and residential mortgages. At the same time, the domestic property market has entered a correction phase, with average house prices falling steadily. Financial analysts note that these shifts are prompting households to actively rebuild their liquid reserves and adjust their long-term wealth portfolios.
Extract H states: 'Financial analysts note that these shifts are prompting households to actively rebuild their liquid reserves...'
Explain two factors that might lead to an increase in the level of household saving.
222 exam-style questions on AQA A Level Economics 2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts, covering 2.2.1 The circular flow of income, 2.2.2 Aggregate demand and aggregate supply analysis, 2.2.3 The determinants of aggregate demand, 2.2.4 Aggregate demand and the level of economic activity, 2.2.5 Determinants of short-run aggregate supply, and 2.2.6 Determinants of long-run aggregate supply. Each one has a worked solution and a mark scheme showing where the marks go.