Which of the following is most likely to influence a household's decision to spend money on a new car?
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D. The household's income The household's income is the most fundamental factor in determining their ability to spend on a new car, as it directly affects their purchasing power. While the other options may influence the decision, they are not as fundamental as income.
A household has £500 left after paying for necessities. They decide to save £200 and spend the rest. What is the opportunity cost of their decision to save?
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B. The £300 spent on goods and services The opportunity cost of saving is the benefit forgone from spending the money on other goods and services. In this case, the household could have spent the £300 on other things, but chose to save £200 instead.
Which of the following is an example of a fixed cost for a household?
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C. Rent Rent is a fixed cost for a household because it remains the same each month, regardless of how much the household spends on other goods and services.
A household has £1,000 in savings and the interest rate on their savings account is 2% per year. How much interest will they earn in one year?
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B. £20 Interest earned = £1,000 * 2% = £20. The household will earn £20 in interest in one year.
Which of the following is most likely to encourage a household to borrow money?
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A. A decrease in the interest rate on loans A decrease in the interest rate on loans makes borrowing cheaper, which is likely to encourage households to borrow more money.
A household has £300 in disposable income. They spend £150 on food, £50 on transport, and £50 on entertainment. How much do they save?
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D. £50 Savings = £300 - (£150 + £50 + £50) = £50. The household saves £50.
Which of the following is an example of a variable cost for a household?
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C. Electricity bills Electricity bills are a variable cost for a household because they fluctuate depending on usage, unlike fixed costs such as council tax or mortgage payments.
A household has £2,000 in savings and the interest rate on their savings account is 3% per year. How much interest will they earn in one year?
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B. £60 Interest earned = £2,000 * 3% = £60. The household will earn £60 in interest in one year.
Which of the following is most likely to discourage a household from borrowing money?
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A. An increase in the interest rate on loans An increase in the interest rate on loans makes borrowing more expensive, which is likely to discourage households from borrowing money.
A household has £400 in disposable income. They spend £100 on food, £100 on transport, and £100 on entertainment. How much do they save?
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C. £100 Savings = £400 - (£100 + £100 + £100) = £100. The household saves £100.
Which of the following is most likely to influence a household's decision to save money?
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D. The interest rate on savings accounts The interest rate on savings accounts directly affects the return on savings, which is likely to influence a household's decision to save money.
A household has £600 in disposable income. They spend £200 on food, £100 on transport, and £100 on entertainment. How much do they save?
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C. £200 Savings = £600 - (£200 + £100 + £100) = £200. The household saves £200.
Which of the following is most likely to influence a household's decision to borrow money?
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B. The availability of credit The availability of credit directly affects a household's ability to borrow money, which is likely to influence their decision to do so.
A household has £800 in disposable income. They spend £300 on food, £200 on transport, and £100 on entertainment. How much do they save?
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C. £200 Savings = £800 - (£300 + £200 + £100) = £200. The household saves £200.
Which of the following is most likely to influence a household's decision to spend money?
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C. The price of goods and services The price of goods and services directly affects the cost of spending, which is likely to influence a household's decision to spend money.