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Specification:

  • Aggregate Demand, The distribution of income and wealth, Monetary policy, Market failure

Click to read the article below and then answer the questions:

UK homeowners secure £800bn windfall with house price rise

  • What have been the main causes for the increase in house prices last year?

  • What is meant by the wealth effect?

  • Explain the significance of gross median pay for workers in the UK increasing by only 26%, compared to the value of UK housing increasing by 75.7%

  • Despite London and the South East experiencing the lowest gains in the value of housing stock, there is still a large gulf in average house prices between London and the south-east and the rest of the UK. Explain the consequences of these regional differences

  • To what extent should the government intervene in the housing market?

Declan Danaher, St George’s Weybridge

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