Which of the following is a benefit of a dual-income household?

• A. Decreased access to credit markets
• B. Lower opportunity cost of leisure time
• C. Reduced total household expenses
• D. Increased financial stability due to higher combined income

Answer: (D)

Verified step by step guidance

1. Understand the concept of a dual-income household: it refers to a household where two members earn income, typically both partners working and contributing financially.
2. Analyze each option by considering the economic implications of having two incomes instead of one.
3. Consider 'Decreased access to credit markets': having two incomes usually improves access to credit, so this is unlikely to be a benefit.
4. Consider 'Lower opportunity cost of leisure time': with two incomes, the opportunity cost of leisure might actually increase because both earners have valuable time, so this is unlikely to be a benefit.
5. Consider 'Reduced total household expenses': total expenses typically do not decrease just because there are two incomes; expenses might stay the same or increase, so this is unlikely to be a benefit.
6. Recognize that 'Increased financial stability due to higher combined income' is a direct benefit of having two incomes, as it generally leads to more resources and better financial security.