Starter quiz
- Which is not a reason why responsible borrowing is important for individuals and the economy?
- It helps avoid financial risk.
- It increases personal spending. ✓
- It ensures financial stability.
-
- Who do government regulations protect from unfair lending and high interest debt traps?
- lenders
- borrowers ✓
- bankers
-
- Match the word to the correct definition.
- borrowing⇔receiving money from a lender with the agreement to pay it back later ✓
- debt⇔amount of money owed by an individual or organisation to a lender ✓
- risk management⇔handling threats to an organisation's capital and earnings ✓
- Complete the sentence: The UK Government borrows to support public spending, infrastructure and economic stability during ______.
- 'crises' ✓
- What does borrowing not allow the Government to do?
- continue funding essential services
- invest in long-term projects
- increase sporting events ✓
-
- Complete the sentence: Responsible borrowing and awareness of financial __________ help individuals and the economy stay secure.
- contributions
- policies
- protections ✓
-
Exit quiz
- How does national debt affect individuals?
- It makes it harder to afford everyday living expenses. ✓
- It increases their earnings and savings.
- It reduces their need to be financially responsible.
-
- Careful management of __________ debt is needed to balance economic stability with public safety and wellbeing.
- personal
- national ✓
- educational
-
- Match the word to the correct definition.
- national debt⇔amount of money owed by the Government that affects the economy ✓
- austerity⇔policies that aim to reduce government budget deficits ✓
- interest rates⇔a rate charged by a lender of money to a borrower ✓
- When ______ lose confidence in the UK Government’s ability to manage national debt, they may demand higher interest rates on government borrowing.
- 'investors' ✓
- What do governments often focus on regarding national debt?
- eliminating debt completely
- ignoring debt issues
- managing debt ✓
-
- Which is not a way that the Bank of England helps manage debt through monetary policies?
- encouraging job creation
- setting interest rates
- discouraging investment ✓
- selling state-owned assets
-
Worksheet
Loading worksheet ...
Presentation
Loading presentation ...
Video
Lesson Details
Key learning points
- The UK Government manages national debt by borrowing money, raising taxes and adjusting public spending.
- If debt is too high, austerity measures may be used, meaning cuts to services like education and healthcare.
- High national debt can lead to increased taxes, higher interest rates and rising costs for essentials.
- National debt affects individuals by making it harder to afford housing, transport and everyday living expenses.
- Careful management of national debt is needed to balance economic stability with public safety and wellbeing.
Common misconception
The UK Government must pay debt off completely, like a household paying off a loan.
Governments often carry debt indefinitely and focus on managing it rather than eliminating it. As long as the Government can afford interest payments and investors have confidence in its ability to repay, borrowing can continue.
Keywords
National debt - an amount of money owed by the Government that has effects on the country's economy
Austerity - a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases or a combination of both
+