The widespread financial insecurity of Americans is primarily because:

• A. government spending has dramatically decreased
• B. the United States has a low unemployment rate
• C. most Americans have high levels of savings
• D. wages have not kept pace with the rising cost of living

Answer: (D)

Verified step by step guidance

1. Identify the key economic concept involved: financial insecurity relates to individuals' ability to meet their expenses and maintain their standard of living.
2. Understand that financial insecurity can be influenced by factors such as wages, cost of living, unemployment rates, government spending, and savings behavior.
3. Analyze each option by considering its impact on financial security: for example, decreased government spending might reduce social safety nets, but is it the primary cause? Similarly, a low unemployment rate usually improves financial security, and high savings would typically reduce insecurity.
4. Focus on the relationship between wages and the cost of living: if wages do not increase at the same rate as the cost of living, individuals' purchasing power declines, leading to financial insecurity.
5. Conclude that the primary reason for widespread financial insecurity is that wages have not kept pace with the rising cost of living, which directly reduces real income and financial stability.