Interest Rates

Question 1

Example of increase in interest rates on mortgages

Answer 1

1% increase means a £200000 will have a £200 monthly increase on morgages

Question 2

Impacts on dept interest

Answer 2

Increases

Question 3

Impact on consumer spending

Answer 3

Decreases
Consumers have less purchasing power

Question 4

Impact on saving

Answer 4

Higher return on saving
Higher propensity to save

Question 5

Impact on borrowing

Answer 5

More expensive

Question 6

Impact on exports and imports

Answer 6

Exports = more expensive
Imports= cheaper

Question 8

Impact on assets

Answer 8

Decrease the value