Question

According to the paradox of thrift increased efforts to save will cause ?

A. an increase in income and an increase in overall saving
B. a decrease in income and an overall decrease in saving
C. a decrease in income but an increase in saving
D. an increase in income but no overall change in saving

Answer 1

The paradox of thrift states that increased efforts to save will cause a decrease in income but an increase in saving.

Step-by-step explanation:

According to the paradox of thrift, increased efforts to save will cause a decrease in income but an increase in saving. When individuals save more, they tend to spend less on goods and services, which leads to a decrease in overall demand in the economy. This decrease in demand can result in lower income levels. However, saving can increase because individuals are setting aside more money for future use.