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2.5 The role of money and financial markets

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Question 5

The Bank of England raises interest rates. A household has a variable-rate mortgage and a business is considering a loan-funded expansion. Which outcome is most likely?

[1]
A

Mortgage payments fall and the expansion becomes more attractive

B

Mortgage payments rise and the expansion becomes less attractive

C

Mortgage payments rise and the expansion becomes more attractive

D

Mortgage payments stay unchanged and borrowing costs fall

Markscheme

2.5 The role of money and financial markets Questions

  1. GCSE
  2. /Economics
  3. /2.5 The role of money and financial markets

27 exam-style questions on AQA GCSE Economics 2.5 The role of money and financial markets, covering 2.5.1a Functions of money, 2.5.1b Definition of money, 2.5.2a Agents in the financial sector, 2.5.2b The role of the Bank of England, and 2.5.2c The role of high street banks. Each one has a worked solution and a mark scheme showing where the marks go.

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