In a balance sheet recession, smart individual choices to save and not spend do not add up to smart choices for the economy as a whole.

Question

Quizplus · Accepted Answer

In a balance sheet recession, when individuals and businesses are focused on reducing their debt and increasing their savings, their individual choices may lead to a decrease in overall demand and economic activity. This can create a cycle of lower consumption, lower investment, and lower economic growth, which can be detrimental to the economy as a whole.

In a Balance Sheet Recession, Smart Individual Choices to Save