Form 4 - Ch. 17 - Households

Which one of these is not a type of income?

• Interest on savings

• Rent paid to you for a property you own

• Salary

• Loan repayments

What type of tax is income tax?

• An indirect tax

• A direct tax

• A value added tax

• A service tax

• None of these

What is disposable income?

• How much you are taxed by the government

• Money you do not spend

• The income you have left to spend after deductions like tax and pensions

• Money you save for a 'rainy day'

Which of these best describes how most low earners save, spend and borrow?

• Save little, spend on necessities, borrow for capital expenditure

• Save as much as they can, spend on holidays and cars, borrow for luxuries

• Save little, spend on household items, borrow nothing

• Save a lot, spend little, borrow a lot

Which of these is current expenditure?

• Cars

• Furniture

• Haircuts

• Washing machine

Which of these is capital expenditure?

• Food

• Clothes

• Cinema

• Laptop

What is conspicuous consumption?

• Where you buy things secretly

• Where you buy things to impress others / improve your social status

• Where you save money wherever possible

• Where you spend as much money as you can

When your liabilities are more than your assets you experience what?

• Positive wealth effects

• Negative equity

• Inflation

• Disposable income

When interest rates fall, which of these happens?

• Spending increases, savings decrease, borrowing increases

• Spending decreases, savings decrease, borrowing decreases

• Spending increases, savings decrease, borrowing decreases

• Spending decreases, savings increase, borrowing increases

In a 'booming' economy, which of these DOES NOT happen?

• High consumer confidence

• Greater spending levels on luxury goods

• Lower savings levels

• Higher spending by businesses on capital goods

• Less borrowing