Microeconomic Decision Makers · 1 question type
Past paper frequency (2018 to 2024)
This topic accounts for approximately 4% of your exam marks.
New emphasis in the 2027 syllabus; influences on households' spending, saving and borrowing, including age and culture, are examined directly. Guidance based on specimen materials.
A household is a group of people, often a family, who share income and make spending decisions together. When income comes in, a household can do three things with it:
Spending (consumption) is using income to buy goods and services now.
Saving is the part of income that is not spent, set aside for the future.
is spending more than current income by taking on debt to be repaid later, usually with interest.
These three are linked. Income that is not spent is saved; borrowing lets a household spend more than its income today at the cost of spending less later. The balance a household strikes between them depends on a set of influences the syllabus expects you to know: income, the rate of interest, confidence, age and culture.