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 the 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.
11(D). Which one of the following, if true, casts the most doubt on the argument?
(A) Prior to the recent recession, middle-income households owed enough debt that they had begun to decrease spending.
(B) The total value of the economy’s household debt is exceeded by the total value of assets held by households.
(C) Low-income households somewhat decreased their spending during the recent recession.
(D) During a recession the affluent usually borrow money only in order to purchase assets.（A）
(E) Household debt is the category of debt least likely to affect the economy
Why not E..The text doesn’t mention anything about middle-income households .
What’s the reasoning line .I am kind of refused
conclusion: the recession was not caused by household indebtedness.
the reasoning line is:
only when the debt was hold by the poor and the assets was hold by the rich that the recession could be caused by household indebtness. but the debt could not be hold by the poor, so the recession could not be caused by household indebtness.
a illustrate that the middle class could hold the debt that result in the recession.
e is out of scope
mage, you've improved a lot.
Thanks!
I am just familiar with economics and management, because of my major. Really poor on other subjects
at least better than me,I am not familar with any subjects.
So I really need to work much much hader!
Thanks for all your replies!
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