The role of the household as a financial unit within the economy

Question 1

How do individuals in paid employment contribute to the country’s economy?

Answer 1

They do so by paying statutory taxes such as PRSI

Question 2

What effect does paying statutory taxes have on the economy?

Answer 2

Paying these taxes provide revenue that the government uses to maintain state services

Question 3

Give an example of a state service which is maintained by taxes

Answer 3

An Garda Síochána

Question 4

How do families help generate wealth and employment in the country?

Answer 4

By spending wages on goods and services

Question 5

What affect does spending wages on goods and services have on the economy?

Answer 5

It helps generate wealth and employment

Question 6

How do households contribute to the profits of financial institutions?

Answer 6

By having mortgages and loans

Question 7

What affect do mortgages and loans have on the economy?

Answer 7

They contribute to the profits of financial institutions such as banks or building societies

Question 8

What type of family does not put pressure on the economy?

Answer 8

Financially self-sufficient families who use their income earned from employment and not social welfare payments to ensure needs are met

Question 9

What type of family puts pressure on the economy?

Answer 9

Families who rely on social welfare payments and not an income from their employment to ensure their needs are met

Question 10

What affect does passing on money management skills have on the economy?

Answer 10

It benefits the economy as it reduces the risk of children falling into debt or relying on social welfare benefits in the future

Question 11

What skills should be passed on to children which the economy may benefit from?

Answer 11

Money management skills such as saving or budgeting

Question 12

Outline the role of the household/family as a financial unit within the economy
(6 points)

Answer 12

1. Families pay taxes which the government uses to fund and maintain state services such as An Garda Síochána
2. Families spend wages on goods and services which generates wealth and employment
3. Loans and mortgages contribute to the profits of financial institutions
4. Some families rely on social welfare payments which puts pressure on the economy
5. Most families are self-sufficient and don’t put pressure on the economy
6. Money management skills are passed on to children which reduces the risk of them falling into debt or relying on social welfare benefits in the future.