Household debts

May 14, 2023

Read the two sentences below, from an analysis of trends in household debt published at the end of 2017. “Debt lets households smooth shocks and invest in high-return assets such as housing or education, raising average consumption over their lifetimes. However, high household debt can make the economy more vulnerable to disruptions, potentially harming growth.” (Zabai, 2017, p.39)

Write an essay that further explains all the statements made in these two sentences, and that makes clear why secured as well as unsecured debt contributes to the costs and benefits they identify. Word limit for Part B: 900 words

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