Households — Paper 1 · IGCSE Economics (9-1) 0987

1 What is an example of the purchase of a consumer good? A A farm owner buys a television. B A farm owner buys additional land. C A farm owner buys fertiliser for their crops. D A farm owner buys some farming equipment.

1 marks

Answer: A

This question in 0987/11 May/June 2020

9 Which combination of influences would increase the level of borrowing by a household? influence 1 influence 2 A becoming pensioners higher rate of inflation B greater wealth lower consumer confidence C higher consumer confidence lower rate of interest D higher rate of interest greater availability of credit

1 marks

Answer: C

This question in 0987/11 May/June 2020

9 What would most likely cause a person to increase their savings? A a decision to plan for retirement B a fall in income C a fall in interest rates D a reduction in tax-free saving schemes

1 marks

Answer: A

This question in 0987/12 May/June 2020

11 People’s income decreases. How is the proportion spent on food and leisure likely to change? food leisure A decrease decrease B decrease increase C increase decrease D increase increase

1 marks

Answer: C

This question in 0987/12 May/June 2020

10 The table shows how household spending changes with income. income spending ($ per month) ($ per month) 3000 3150 3300 3375 3600 3500 3900 3825 4200 4050 4500 4275 What is the lowest level of income at which savings are positive? A $3000 B $3600 C $3900 D $4200

1 marks

Answer: B

This question in 0987/12 Oct/Nov 2020

9 What might cause consumers in a high-income economy to both save more and spend more? A an increase in the rate of interest B an increase in wealth C expectation that prices will fall in the future D inflation rising at a faster rate than wages

1 marks

Answer: B

This question in 0987/12 May/June 2021

14 The table shows how three people, X, Y and Z, spend their income. person X person Y person Z food, clothing and housing 30% 25% 50% entertainment and leisure 35% 35% 25% luxury goods 35% 40% 25% What is the likely order of income, from lowest income to highest income, for these three people? A Y  X  Z B Y  Z  X C Z  X  Y D Z  Y  X

1 marks

Answer: C

This question in 0987/12 May/June 2022

11 Which statement about different income groups is correct? A High-income groups do not need to borrow money. B High-income groups save less money than low-income groups. C Low-income groups find it easier to borrow than high-income groups. D Low-income groups save a smaller percentage of their income than high-income groups.

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2022

12 A country’s central bank raised the rate of interest from 1% to 4% per year. How would this change have affected the amount saved and the cost of borrowing by individuals? amount cost of saved borrowing A decreased decreased B decreased increased C increased decreased D increased increased

1 marks

Answer: D

This question in 0987/11 May/June 2023

19 What would be most likely to encourage saving? A a rise in the exchange rate B a rise in the goods and services tax rate C a rise in the income tax rate D a rise in the interest rate

1 marks

Answer: D

This question in 0987/11 May/June 2023

11 What would cause a decrease in spending by households in a country? A a reduction in disposable income B a reduction in the rate of sales tax C lower interest rates D lower savings

1 marks

Answer: A

This question in 0987/12 May/June 2024

11 The table shows the proportion of disposable income spent on three different goods by four different households. Which household is likely to have the lowest income? food transport holidays % % % A 50 15 5 B 35 18 10 C 30 20 15 D 20 25 20

1 marks

Answer: A

This question in 0987/12 Oct/Nov 2025