A household has spare income and money in a savings account. The interest rate paid on the account rises. What is the most likely effect on the household's behaviour?
Borrowing becomes cheaper, so the household may use credit for more purchases
Its savings lose value, so the household may save more to make up the loss
Saving becomes more rewarding, so the household may put off some spending
Spending today becomes cheaper, so the household may buy more goods now
116 exam-style questions on OCR GCSE Economics 3.6 Monetary policy, covering 3.6.1 What is monetary policy, 3.6.2 Monetary policy and macro objectives, and 3.6.3 Effects of monetary policy. Each one has a worked solution and a mark scheme showing where the marks go.