The paradox of thrift does not exist in the long run because
A)not everyone increases saving in the long run.
B)aggregate supply has an impact on real GDP only in the short run.
C)everyone increases consumption in the long run.
D)changes in aggregate demand have no impact on real GDP in the long run.
E)potential output is determined by changes in the price level.

Question

Quizplus · Accepted Answer

In the long run, the economy is at full employment, and changes in aggregate demand do not affect real GDP, as it is determined by factors like technology and resources, not by demand.

The Paradox of Thrift Does Not Exist in the Long