What do a rubber-necking traffic jam and the paradox of thrift have in common?
A) Individual behavior has large negative consequences for the whole of society.
B) Seemingly bad behavior ends up harming everyone.
C) Seemingly careless behavior leads to good times for all.
D) Government intervention can only make matters worse.

Question

Quizplus · Accepted Answer

Both a rubber-necking traffic jam and the paradox of thrift involve individual behavior that has negative consequences for society as a whole. In the case of a traffic jam, drivers slowing down to look at an accident causes congestion and delays for everyone else. In the case of the paradox of thrift, individuals saving more money during an economic downturn can actually worsen the overall economic situation by reducing consumer spending and aggregate demand.

What Do a Rubber-Necking Traffic Jam and the Paradox of Thrift