The Paradox of Thrift highlights the idea that
A)saving more is good for the economy in the short run.
B)saving more can be bad for the economy during a recession.
C)in spending more, households will end up saving less.
D)in spending more, workers may end up losing their jobs.

Question

Quizplus · Accepted Answer

The Paradox of Thrift suggests that while saving is generally good for individuals, if everyone saves more during a recession, it can lead to decreased aggregate demand, lower production, and higher unemployment, worsening the economic downturn.

The Paradox of Thrift Highlights the Idea That