According to the paradox of thrift,if many families decided to save an additional $200 a month,this would lead to

Question

Quizplus · Accepted Answer

The paradox of thrift suggests that if many families decide to save more, their individual saving contributes to a reduction in total consumption spending, which ultimately reduces total output and employment. This means that while there may be an increase in total savings due to individual decisions to save more, this does not translate into an increase in overall economic growth or output. Therefore, choice C is the correct answer. Choices A, B, and D are incorrect because they assume that an increase in savings leads to an increase in output or investment, which contradicts the paradox of thrift.

According to the Paradox of Thrift,if Many Families Decided to Save