When households have very low savings ________.
A)investment decreases
B)they are less able to cope with severe economic downturns
C)bankruptcies increase
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

When households have very low savings, it leads to a reduction in investment because there are fewer funds available for borrowing from banks and other financial institutions. Additionally, households with low savings are less able to cope with severe economic downturns. They are more likely to experience financial hardship or even bankruptcy in the event of job loss or a recession. Therefore, all of the options mentioned in the answer choice are correct.

When Households Have Very Low Savings ________