Consumption & saving

UK household savings as a percentage of household disposable income, quarter 1 (Q1) 2015 to quarter 3 (Q3) 2021

(Source: https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/dgd8/ukea)

With reference to the chart above, which one of the following is correct?

UK household savings as a percentage of household disposable income:

In Q4 of 2015 average household disposable income was £26 300.

Calculate the total amount of money saved by the average household in Q4 of 2015.

Explain one likely reason for the change in total household savings from Q1 2020 to Q2 2020.

UK consumption, % of GDP, 2004–2021

(Source: adapted from https://data.worldbank.org/indicator/NE.CON.TOTL.ZS?end=2021& locations=GB&start=2002)

Which one of the following is an example of consumption?

With reference to the chart on the previous page, explain the likely effect of a fall in the marginal propensity to consume on the level of real GDP. Refer to the multiplier in your answer.

Annual percentage change in average UK house prices

(Source: adapted from https://www.nationwide.co.uk/-/media/MainSite/ documents/about/house-price-index/2021/May_2021.pdf)

With reference to the chart, which one of the following is true?

Average UK house prices:

With reference to the chart on the previous page, explain the likely impact of an increase in average house prices on UK consumption.

Which one of the following diagrams illustrates the impact of an increase in net exports along a Keynesian long-run aggregate supply curve?

Using the classical long-run aggregate supply curve, explain what will happen in the long run to real output if aggregate demand increases.

Explain the likely impact on aggregate demand of a fall in average house prices.

UK total bank lending to individuals, percentage change on previous year

Explain one likely reason why consumer demand for bank loans has increased.

Which one of the following is most likely to result from an increase in bank lending to individuals?

Calculate the index number for the total value of bank lending in 2016 using 2015 as a base year.

The table below shows marginal propensity to save data for an economy.

Explain one possible reason for the changes in the marginal propensity to save as shown in the table.

Explain the likely effect of a fall in the marginal propensity to save on the value of the multiplier if other things remain equal.

An economy has marginal propensity to save of 0.1, marginal propensity to tax of 0.2 and marginal propensity to import of 0.1.

Which one of the following is the correct size of the multiplier?

A 0.4

B 0.6

C 1.7

D 2.5