The paradox of thrift refers to the idea that

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The paradox of thrift states that if everyone tries to save more during an economic downturn, then aggregate demand will fall, which can lead to a reduction in economic growth, and in turn, a fall in incomes. This is because when people save more, they spend less, and demand for goods and services declines, causing a negative multiplier effect throughout the economy. Therefore, the paradox of thrift highlights the potential negative consequences of saving too much during a recession.

The Paradox of Thrift Refers to the Idea That