2.3

Question 1

Economy

Answer 1

The economy is made up of millions of individual consumers, many thousands of businesses and governments. All take decisions on what to buy and produce.

Question 2

Consumers

Answer 2

Consumers are individuals who buy goods and services from businesses.

Question 3

Economic climate

Answer 3

The economic climate describes the state of key factors within a country such as the level of goods and services produced and the number of jobs available.

Question 4

Interest rates

Answer 4

Interest rates refer to the cost of borrowing money or the reward for saving money, expressed as a percentage.

Question 5

Overdraft

Answer 5

An overdraft is a flexible loan which businesses can use, whenever necessary, up to an agreed limit.

Question 6

Consumer spending

Answer 6

Consumer spending refers to the value of goods and services bought by consumers over a time period, usually a month or a year.

Question 7

Income elastic products

Answer 7

Income elastic products are those whose sales are sensitive to changes in consumers’ incomes.