Multiple Choice
In the basic AD/AS macro model,the "paradox of thrift" is only a short-run phenomenon because
A) consumers exhibit cyclical consumption behaviour.
B) in the long run output is determined by potential output.
C) savings are transformed into expenditures in the long run.
D) the marginal propensity to consume is fixed in the long run.
E) consumers base their consumption expenditures only on their lifetime income.
Correct Answer:

Verified
Correct Answer:
Verified
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