A government raises the state pension and Child Benefit. The table shows the extra income each group of recipients receives in a year and the proportion of that extra income they spend.
| Group | Extra income from the benefit rise | Proportion spent |
|---|---|---|
| Pensioners | £150 million | 70% |
| Families with children | £90 million | 90% |
Calculate the total increase in household spending and explain what this suggests about the effect of the benefit rises on total spending in the economy.
76 exam-style questions on OCR GCSE Economics 3.5 Fiscal policy, covering 3.5.1 Government spending and revenue, 3.5.2 Budget balance, surplus and deficit, 3.5.3 What is fiscal policy, 3.5.4 Calculate effects of taxes and spending, 3.5.5 Analyse effects of taxes and spending, 3.5.6 Costs and benefits of fiscal policy, and 3.5.7 Redistributing income and wealth. Each one has a worked solution and a mark scheme showing where the marks go.