The interest rate on a £320,000 variable-rate loan rises from 4% to 6%. Ignoring repayments and compounding, which outcome is most likely?
Annual interest falls by £6,400, raising spending
Annual interest rises by £3,200, with no effect on spending
Annual interest rises by £19,200, increasing saving
Annual interest rises by £6,400, which may reduce the borrower's consumer spending
29 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.