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2.1 Introduction to the national economy

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Question 23

The old dough mixer at a commercial bakery has broken down several times this year, so the owners have applied to their bank for a business loan to pay for a new industrial mixer. While the application is being considered, the bank cuts the interest rate it will charge on the loan.

What is the most likely effect on the bakery's decision to buy the mixer?

[1]
A

The bakery is more likely to buy the mixer, because the sum it has to borrow becomes smaller

B

The bakery is less likely to buy the mixer, because lower interest rates make saving more rewarding

C

The bakery's decision is unchanged, because the price of the mixer stays the same

D

The bakery is more likely to buy the mixer, because paying for it with a loan now costs less

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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