What does the "paradox of thrift" say?
A) People who consume too much will go broke.
B) Businesses that are greedy will make the most profit.
C) An economy that saves too much can end up with lower total savings.
D) People who save too little are harming the economy.

Question

Quizplus · Accepted Answer

The "paradox of thrift" suggests that if everyone saves more during a recession, aggregate demand will fall, leading to lower total savings in the economy due to decreased income and output.

What Does the "Paradox of Thrift" Say