Green Bridge Learning Resource For Households

Overview

Every household faces the same daily choice: how much of its income to spend now and how much to save for later. Multiply that choice by millions of homes and you get one of the biggest forces in the economy. But what tips a family toward spending or saving in the first place?

In this lesson you will explore the influences on how households divide their income between spending, saving and borrowing: their level of income, the rate of interest, how confident they feel, their age and their culture. Understanding these influences explains everything from a shopping boom to a savings drought.

Lesson Evaluation

Congratulations on completing the lesson on Households. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.

You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.

Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.

A rise in the rate of interest is most likely to cause households to: A. save more and borrow less B. save less and borrow more C. spend all their income D. stop working Answer: A
As household income rises, the proportion of income saved tends to: A. fall to zero B. stay exactly the same C. rise D. always halve Answer: C
Which group of households typically saves the most? A. young students B. middle-aged workers at peak earnings C. retired people D. the unemployed Answer: B
A fall in consumer confidence is likely to cause households to: A. spend more on credit B. save more as a precaution C. borrow more D. ignore the future Answer: B
Borrowing by households means: A. saving for the future B. earning interest C. spending more than current income using debt D. paying taxes Answer: C