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2.3 How the government manages the economy

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Question 16

A country has weak economic growth and rising unemployment. Its central bank lowers the base rate.

Which change in household behaviour is the lower base rate most likely to encourage?

[1]
A

Households save more and spend less, as saving is more rewarding

B

Households keep spending the same, as only firms' loan rates change

C

Households borrow less and spend less, as loans become dearer

D

Households save less and spend more, as saving is less rewarding

Markscheme

2.3 How the government manages the economy Questions

  1. GCSE
  2. /Economics
  3. /2.3 How the government manages the economy

104 exam-style questions on AQA GCSE Economics 2.3 How the government manages the economy, covering 2.3.1a Fiscal policy and income and expenditure, 2.3.1b Fiscal policy and government objectives, 2.3.1c The government budget, 2.3.2a The meaning of monetary policy, 2.3.2b Uses of monetary policy, 2.3.3a Supply-side policies and their trade-offs, 2.3.3b Using supply-side policies, and 2.3.4 Policies to correct positive and negative externalities. Each one has a worked solution and a mark scheme showing where the marks go.

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