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Household indebtedness

Expert replies
by abhirup1711 » Sun Dec 30, 2012 10:43 pm
33. Household indebtedness, which some theorists regard as causing recession, was high preceding the recent recession, but so was the value of assets owned by households. Admittedly, if most of the assets were owned by quite affluent households, and most of the debt was owed by low-income households, high household debt levels could have been the cause of the recession despite high asset values: low-income households might have decreased spending in order to pay off debts while quite affluent ones might simply have failed to increase spending. But, in fact, quite affluent people must have owed most of the household debt, since money is not lent to those without assets. Therefore, the real cause must lie elsewhere.

The argument is structured to lead to which one of the following conclusions?
A. High levels of household debt did not cause the recent recession.
B. Low-income households succeeded in paying off their debts despite the recent recession.
C. Affluent people probably increased their spending levels during the recent recession.
D. High levels of household debt have little impact on the economy.
E. When people borrowed money prior to the recent recession, they did not use it to purchase assets.
Please explain
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Source: — Critical Reasoning |

by abctongji » Sun Dec 30, 2012 10:52 pm
abhirup1711 wrote:33. Household indebtedness, which some theorists regard as causing recession, was high preceding the recent recession, but so was the value of assets owned by households. Admittedly, if most of the assets were owned by quite affluent households, and most of the debt was owed by low-income households, high household debt levels could have been the cause of the recession despite high asset values: low-income households might have decreased spending in order to pay off debts while quite affluent ones might simply have failed to increase spending. But, in fact, quite affluent people must have owed most of the household debt, since money is not lent to those without assets. Therefore, the real cause must lie elsewhere.

The argument is structured to lead to which one of the following conclusions?
A. High levels of household debt did not cause the recent recession.
B. Low-income households succeeded in paying off their debts despite the recent recession.
C. Affluent people probably increased their spending levels during the recent recession.
D. High levels of household debt have little impact on the economy.
E. When people borrowed money prior to the recent recession, they did not use it to purchase assets.
Please explain
I will go for A.
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by fulltapori » Tue Jan 01, 2013 8:06 pm
IMO C
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by Sam_hellboy » Tue Jan 01, 2013 10:42 pm
IMO E
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by himu » Wed Jan 02, 2013 12:09 am
IMO A
what is the OA ?
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by seamaster1 » Wed Jan 02, 2013 1:03 am
I go for A
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by dealer88 » Sat Jan 05, 2013 1:14 am
IMA ...
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by Ugo2602 » Tue Jun 25, 2013 1:00 am
IMO : A
Can you please post the OA?
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by Imsukhi » Wed Jun 26, 2013 9:25 am
IMO A
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by Gaurav 2013-fall » Wed Jul 03, 2013 1:22 am
+1 for C

good problem.....post more of such probelms. certainly a level 700 problem.
Let me tell you something you already know. The world ain't all sunshine and rainbows. It is a very mean and nasty place and it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain't how hard you hit; it's about how hard you can get hit, and keep moving forward. How much you can take, and keep moving forward. That's how winning is done. Now, if you know what you're worth, then go out and get what you're worth. But you gotta be willing to take the hit, and not pointing fingers saying you ain't where you are because of him, or her, or anybody. Cowards do that and that ain't you. You're better than that! (Rocky VI)
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