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 highlights the idea that saving more can be bad for the economy during a recession. This is because if everyone starts saving more and spending less, it can lead to a decrease in demand for goods and services, which can lead to a decrease in production and even higher unemployment. Therefore, while saving is generally a good thing in the long run, during a recession, it can make things worse.

The Paradox of Thrift Highlights the Idea That