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Which of the Following Most Clearly States the "Paradox of Thrift

Question 94

Multiple Choice

Which of the following most clearly states the "paradox of thrift"?


A) If households simultaneously attempt to increase their savings, the result may be a reduction in demand, output, and total savings.
B) A strong, healthy economy can be achieved if most households are heavily in debt.
C) A high savings rate will provide the funds for investment, which is a driving force of long-term economic growth.
D) A reduction in savings and an increase in consumption will expand output and employment.

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