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2.1 Introduction to the national economy

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Question 22

Several additional banks begin offering business loans to independent childcare providers in a town. The providers can now compare offers from more lenders. Borrowers' risk, loan terms, security and the Bank of England base rate do not change.

Which outcome is most likely after this change?

[1]
A

Interest rates tend to rise because borrowers now have more lenders to choose from

B

Interest rates tend to stay the same because the borrowers' risk has not changed

C

Interest rates tend to fall because the providers become less likely to default

D

Interest rates tend to fall because lenders compete to attract borrowers

Markscheme

2.1 Introduction to the national economy Questions

  1. GCSE
  2. /Economics
  3. /2.1 Introduction to the national economy

75 exam-style questions on AQA GCSE Economics 2.1 Introduction to the national economy, covering 2.1.1a What an interest rate is, 2.1.1b Interest rates and consumer decisions, 2.1.1c Interest rates, producer decisions and calculations, 2.1.2a UK government revenue and spending, and 2.1.2b Direct, indirect and progressive taxation. Each one has a worked solution and a mark scheme showing where the marks go.

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