Reference no: EM131096057

Country X is a growing economy located in southeast Asia. Although it has a large population, it also has a disproportionately high number of working age people. A large English-speaking workforce and low labor costs make it a competitive outsourcing destination. However, as is the case with most growing economies, inflation is quite high in country X. As a country that is poised to be an economic superpower, country X's stock markets are booming, Real estate prices have been encreasing by 20 percent each year. Salim Habib is a guest speaker at a talk organized consumption and investment will fall. Ricky Cafrall, a student is not convinced. He claims that the rally in housing and stock prices will actually increase household wealth and consumption. Which of the following if true will weaken Salim's claim that domestic consumption and investment will most likely declined in the near future? A.with a recent increase in government spending on road construction projects across the country , unemployment is expected to decline by 3 percent. B. Due to the rapid rise in service -related exports,the value of country X's currency is becomeing stronger. C. Cash balance with firms in country X have hit record levels in the past six months. D. The investment multiplier in country X is estimated to be very high. E.The government of country X recently reduced the welfare benefits that it pays to unemployed individuals.