The "paradox of thrift" refers to the understandable tendency of people who are worried about their economic situation to ________ their saving,but in aggregate this behaviour causes a ________ recession.
A)decrease; more severe
B)decrease; less severe
C)increase; more severe
D)increase; less severe
E)increase; shorter

Question

Quizplus · Accepted Answer

The "paradox of thrift" posits that while it's rational for individuals to save more during economic uncertainty, if everyone does so simultaneously, it reduces overall consumption. This decrease in consumption can lead to a decrease in overall economic activity, potentially making a recession more severe.

The "Paradox of Thrift" Refers to the Understandable Tendency of People