Which Partner Is Considered the Most Vulnerable as a Result

question 18

Multiple Choice

Which partner is considered the most vulnerable as a result of a computation of vulnerability rankings?

• A)The partner who has the lowest loss absorption potential
• B)The partner who has the highest loss absorption potential
• C)The partner with the highest capital account balance
• D)The partner with the lowest capital account balance

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Definitions:

Disposable Income

The liquidity pool available for households to channel into saving and spending after income tax deductions.

Induced Consumption

The part of consumer spending that increases when disposable income rises and decreases when disposable income falls.

Disposable Income

The amount of money left for spending and saving after income taxes have been deducted.

Autonomous Consumption

The level of consumption that does not change with fluctuation in income; it is the consumption level when income is zero.