Question 24 (1 point)

The below is an excerpt from a news article that was published online in February 2015.

American households picked up spending in the fourth quarter and remained confident in early 2015, indicating the economy is poised to overcome any bumps caused by slower global demand.

The biggest gain in consumer purchases in four years helped gross domestic product expand at a 2.2 percent annualized rate at the end of 2014, ... according to Commerce Department data issued Friday in Washington.

An improving job market and generally cheaper fuel probably will help sustain consumer spending, which accounts for almost 70 percent of the economy. That will be critical in supporting the expansion as the lingering effects of the work stoppage at West Coast ports and harsh winter weather, combined with a rising dollar and slower growth among trading partners, hold back American factories.

What is the central idea of the excerpt and how does the excerpt develop this idea over the course of the text?

a
demonstrates the importance of inflation in stabilizing the economy
b
the economy is contracting and may continue to do so
c
unemployment is increasing and may continue to do so
d
demonstrates the importance of consumer spending for the overall economy

1 answer

The central idea of the excerpt is:

d) demonstrates the importance of consumer spending for the overall economy.

The excerpt develops this idea by highlighting that American households increased their spending, contributing to gross domestic product (GDP) growth. It notes that consumer spending accounts for nearly 70 percent of the economy and points out factors like an improving job market and lower fuel prices that are likely to sustain this spending. The text also emphasizes that consumer spending will be crucial in supporting economic expansion amidst challenges such as global demand fluctuations and external economic pressures. Thus, the excerpt underscores how vital consumer spending is for the overall health and expansion of the economy.