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2.3 How the government manages the economy

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Question 35

The Okafor household has savings in an account whose interest rate follows the Bank of England's base rate. It also has a car loan with an interest rate that is fixed until the loan is repaid. The Bank of England lowers the base rate.

What is the most likely immediate effect on the Okafor household?

[1]
A

It earns less interest on its savings, and its car loan repayments stay the same

B

Its car loan repayments fall, and the interest on its savings stays the same

C

Its car loan repayments fall, and it earns less interest on its savings

D

It earns more interest on its savings, and its car loan repayments stay the same

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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