Our Economy: Strand 3


Be Prepared – Examination Section A: Short Questions (2 to 2½ minutes per question)


1. Differentiate between interest rates and inflation by answering true or false to each of the following statements. Place a tick () after each statement to indicate whether it is true or false.


True


Interest rates are expressed in percentage.


Inflation is calculated by the ECB. Interest rates remain fixed. Inflation affects your spending power.


2. List two factors that cause inflation. 1. 2.


3. ‘Unemployment decreases and economic growth increases in 2021.’ Indicate if these changes are good or bad for the Irish economy.


Economic indicator


Unemployment Economic growth


4. List two benefits of employment.


1. 2.


5. List two impacts of interest rates. 1. 2.


6. ‘The Irish economy is growing three times faster than any other European country.’ (i) State two ways in which economic growth can have a positive impact on an individual. (ii) State two ways in which economic growth can have a positive impact on a business. 7. Explain what is meant by the following terms:


National income National debt


8. (i) Explain what is meant by the term ‘unemployment’. (ii) Explain two benefits of a low rate of employment to the economy.


9. Mary, a business graduate, has recently received a promotion. After watching a TV programme, she is considering saving in order to purchase an apartment.


(i) What is the impact of high inflation on savings? (ii) What is the impact of high inflation on the economy?


10. John is going to buy his first car, a Volkswagen Golf. John contacts two financial institutions, both quoting the same rate. Bank 1 has an APR of 8% and Bank 2 has a flat rate of 10%.


(i) Explain what is meant by ‘financial institution’. (ii) Which option should John choose: Bank 1 or Bank 2? (iii) Give a reason for your answer.


396 Good Bad False Question Time


1. Section A: Short Questions 2. Section B: Long Questions


Sorry


to BUG you. Always use the


BUG technique: Box, Underline, and Glance.


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