Household indebtedness, which some theorists regard as causing recession, was high preceding the recent recession, bu...
BatmanNovember 10, 2013
Help, plz
I picked up the answer (a) just by eliminating apparently wrong answer. So I still don't clearly understand why (a) is an answer. Please, make me understood~
Thanks, always
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The conclusion of this argument is: "the real cause [of the recession] must lie elsewhere." Why? because "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" but "quite affluent people must have owed most of the household debt, since money is not lent to those without assets." This is a cause and effect argument.
(A) is CORRECT because it presents another group that the argument did not consider: middle-income households. Middle-income households have assets, but can also have debt. Since middle-income households do have assets, money could still be lent to them, meaning they could still accrue high household debt levels. Therefore, the theory of household indebtedness causing recession could still be valid.
(B) is incorrect because it does not weaken the argument. It still doesn't help us explain how household indebtedness could be the cause of recession even though low-income households could not have accrued high levels of household debt because banks wouldn't lend money to them in the first place due to their lack of assets.
(C) is incorrect because it does not weaken the argument. Just like answer choice (B), it does not explain how household indebtedness could be the cause of recession even though low-income households could not have accrued high levels of household debt because banks wouldn't lend money to them in the first place due to their lack of assets.
(D) is incorrect because it is irrelevant. We are trying to explain what caused the recent recession. We do not care what happens during these recessions.
(E) is incorrect because, if anything, it seems to strengthen the conclusion of the argument that the real cause of recession must be something other than household indebtedness.
Hope that helps! Let me know if you have any more questions.
