Economic (STEEPLE)

Question 1

Interest rates

Answer 1

Reward for saving and cost of borrowing expressed as a percentage of the money saved or borrowed
Up until May 1997, government set interest rates, but now the Bank of England and monetary policy committee do it

Question 2

Low interest rates - impact on business

Answer 2

Can have more loans due to lower repayments
May spend more, increased sales due to more disposable income

Question 3

Low interest rates - impact on borrowers

Answer 3

Can pay back quicker and easier
More disposable income so demand and economy increases

Question 4

Low interest rates - impact on savers

Answer 4

Won’t make as much money
Spend more as less incentive to save

Question 5

High interest rates - impact on businesses

Answer 5

Can’t have as many loans, less likely to expand by borrowing
Decreased sales (especially luxury items)

Question 6

High interest rates - impact on borrowers

Answer 6

Harder to pay back
less disposable income
Less spending so lower GDP

Question 7

High interest rates - impact on savers

Answer 7

Will make more money
Spend less as made reward for saving

Question 8

High GDP leads to….

Answer 8

….economic growth, with an increase in employment (and a further increase in GDP)

Question 9

SPICED

Answer 9

Strong Pound Imports Cheap Exports Dear