Households Flashcards
1
Q
Define ‘Disposable Income’.
A
Income after income tax has been deducted and state benefits received.
2
Q
Define ‘Rate of Interest’.
A
A charge for borrowing money and a payment for lending money.
3
Q
Define ‘Average Prospensity to Consume’.
A
The proportion of household disposable income which is spent.
4
Q
Define ‘Savings Ratio’.
A
The proportion of household disposable income that is saved.
5
Q
What is a loan to help buy a house called?
A
Mortgage
6
Q
What are the 7 main influences on saving?
A
- income
- wealth
- rates of interest
- tax treatment of savings
- range and quality of financial institutions
- age structure
- social attitudes
7
Q
Why do people borrow money?
A
To spend more than their disposable income.
8
Q
What are the main influences on borrowing?
A
- the availability of loans
- rates of interest
- confidence
- social attitudes
