Consumption

Q2(a) Using a table of average UK house prices for January to March 2023, identify which statement can be deduced from the data.

Q2(b) Explain how people already owning UK homes were likely affected by average prices dropping between January and March 2023.

Q12(d) Examine how weaker household spending in Japan is likely to affect its real output.

Q6 Deduce what rising Mexican consumer confidence from 2021 to 2023 does to the price level and real output.

Q7 Explain one macroeconomic effect on people who already own homes of Canadian house prices falling 8.5% over a year.

Q2(a) State what marginal propensity to consume means (2-mark defined term).

Q2(b) Give one influence that might push household spending in the UK higher, and explain how it works.

Q6 Deduce what three months of falling average UK house prices imply for people who already own homes.

Q11 Explain the wealth effect using the 6% rise in Indian house prices during 2022.

Q8 Sketch an AD and SRAS diagram for the rise in eurozone consumer confidence over winter 2022-23.

Q8 Sketch an AD and SRAS diagram showing the effect of the US saving ratio falling by over four percentage points in a year.

Q4(a) Identify which item counts as consumption (building a cycle lane / Heathrow expansion / school buildings / buying clothes).

Q2(d) Evaluate what a decline in house prices does at both micro and macro level.

Q4 Identify how rising New Zealand house prices between 2018 and 2021 most likely affected existing homeowners.

Q10 UK average house prices rose 11.5% in the year to September 2021 from £258 155; explain one likely macroeconomic impact on existing homeowners.

Q11 Set out the meaning of the savings ratio, using the Latvia chart covering 2016 to 2021.

Q8 Philippine house prices dropped more than 10% during 2021; sketch AD and LRAS to show where price level and real output end up.

Q2(a) Pick the true statement from a chart of average UK house prices, year-on-year percentage change, 2018–2021.

Q2(b) Using the house price chart, explain how dearer housing feeds through to consumer spending in the UK.

Q12(b) Using Figure 1, set out the meaning of the savings ratio.

Q12(c) Explain analytically two factors that lifted household consumption in quarter 3 of 2020, drawing on the second paragraph of Extract A.

Q10 With reference to a chart of Turkish house price growth from October 2019 to October 2020, explain one likely macroeconomic impact of rising house prices on existing homeowners.

Q2(c) Explain how a drop in average house prices would be expected to feed through to aggregate demand.

Q8 Australian consumer confidence slid from 91.9 to 75.6 across March and April 2020: use an LRAS and AD diagram to show effects on prices and real output.

Q8 Average real house prices in Sydney fell 15% in Q1 2019; explain one possible impact on the level of consumption.

Q4 Using a chart of Portugal's quarterly household savings ratio from 2014 to 2019, identify what is most likely to have risen according to the long-term trend. (consumption / exports / unemployment / withdrawals)

Q6(c) Explain two probable determinants of UK real household consumption, drawing on Figure 2 and Extract A.

Q12(a) State what 'consumption' means as Extract A uses it — a brief definition worth two marks.

Q12(c) Drawing on Extract A, analyse one way Canada's economy could be affected at the macro level by climbing house prices.

Q1(a) Select the change most likely to push credit card lending upwards (cheaper borrowing / weaker investment / wider current account deficit / more saving).

Q1(b) From the 2015–2017 chart of monthly UK credit card lending, index the March 2017 figure against a January 2016 base of 100.

Q5(a) Say how climbing average UK house prices would most affect people who already own a home (confidence up / income up / spending down / negative wealth effect).

Q10 Explain the meaning of the savings ratio, noting the general direction of the UK chart running from January 2015 to July 2017.

Q14 Evaluate whether growing consumer spending is invariably good for an economy, given household consumption powering India's rapid growth.

Q5(a) Explain one probable cause of the rise in household demand for bank loans.

Q5(b) More bank lending to households is most likely to produce which outcome? (better net trade / higher consumption / higher unemployment / deflation)

Q5(c) Using 2015 as base, calculate the 2016 index number for total UK bank lending.

Q6(b) Drawing on Extract A, assess what rising house prices do to the wider economy, with AD/AS support.

Q4(a) Label an AD/AS diagram with the probable effect on UK price level and real output of raising the personal allowance to £11 000 from £10 600.

Q5(a) From a 2008–2015 chart of UK consumer confidence, explain one plausible cause of its movement across 2012 to 2015.

Q5(b) Say which marginal propensity would most likely fall once UK consumer confidence strengthens (consume / tax / import / save).

Q6(b) Assess how UK consumers are affected when real incomes fall.