The substantial increase in household debt relative to income since the mid 1980s meant that in 2008 many households
A) had little savings or other reserve assets for use to deal with unexpected expenditures.
B) could safely afford to purchase larger homes because housing is always a good investment.
C) could spend everything they earned because their interest obligations on outstanding credit were low.
D) would be able to easily adjust their current spending if their monthly payments on adjustable rate mortgages rose.

Question

Quizplus · Accepted Answer

The increase in household debt relative to income often leads to reduced savings, leaving households with fewer reserve assets to handle unexpected expenses.

The Substantial Increase in Household Debt Relative to Income Since