Economics Revision Unit 8

What is disposable income?

Disposable income is the amount of income availble for spending after the taxes are paid

What is spending?

Spending is the paying out money to buy goods or hire services

GIve the factors affecting spending

• Prices of goods and services

• Rate of interest

• Wealth

• Expectations

What is income tax?

Income tacx is a compulsory payment charged by the government on income

What is savings?

Savings refers to the part of income that is kept for future use

Give the purposes of savings

• Future use

• Unexpected expenses

• Retirement

• To maximise income

Give the factors affecting savings

• Disposable income

• Rate of interest

• Age groups

• Expectations

What is borrowing?

Borrowing refers taking money from a person or a financial instituition which must be repaid in the future

What is interest?

Interest is a payment over and abov the initial amount borrowed.

What is loan?

A loan is money borrowed which has to be repaid with interest over a given period of time

Give the factors affecting borrowing

• availability of loan

• Rate of interest

• Expectation

• Social attitudes