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If most of the households in a country are NOT credit-constrained then which of the following is CORRECT? Consumption path of most of the households will NOT follow their income path O Consumption will depend mostly on income for a lot of households Most of the households will not be able to take loans from the banks O Most of the households will NOT be able to consume more than their income O US EUROZONE CHINA TURKEY CONSUMPTION (C) 68
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If most of the households in a country are NOT credit-constrained then which of the following is CORRECT? Consumption path of most of the households will NOT follow their income path O Consumption will depend mostly on income for a lot of households Most of the households will not be able to take loans from the banks O Most of the households will NOT be able to consume more than their income O
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US EUROZONE CHINA TURKEY CONSUMPTION (C) 68.4% 55.9% 37.3% 70.8% GOVERNMENT SPENDING (G) 15.1% 21.1% 14.1% 15.1% INVESTMENT (1) 19.1% 19.5% 47.3% 21 % EXPORTS (X) 13.6% 43.9% 26.2% 25.6% IMPORTS (M) 16.6% 40.5% 23.8% 32.2% Which of the following is CORRECT according to the above table (GDP from 2013)? O The share of consumption in total GDP is highest in the USA 0 Eurozone countries on average have the largest government spending share total GDP 0 China is the largest exporter in terms of the share of exports in total GDP O Import shares are greater than export shares in all countries
Expert Solution
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As we know that , the Consumption pattern of an individual depends on the income patterns. As the income of the Consumer increases he may Consume more of a good. The consumption patterns follows a trend.
Most of the households are credit constrained, and they cannot get additional money to spend on the goods.
The correct option is (c).
Most of the households will not be able to take loans from the banks.
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Correct answer is second option:
Eurozone countries on average have the largest government spending share in total GDP.
? It is because US does not have the largest share in consumption in total GDP. Turkey's share is more in consumption in total GDP. So, first option can not be correct.
? In second option it has been said Eurozone has on average largest share in government in total GDP and it is correct because Eurozone share in government spending (21.1%) is largest among all four.
? Third option is also not correct because China does not have the largest share in exports because Eurozone's share in export is more (43.9%) than China's share of export (26.2%) in total GDP.
? Fourth option is also not correct because all the countries does not have more share in import than export. Eurozone and China has more share in export than import.
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