Which of the Following Illustrates the Paradox of Thrift

Multiple Choice

Which of the following illustrates the paradox of thrift?

A) Consumer uncertainty causes people to save less;consumption rises;equilibrium income and production drop;savings drop because income is lower.
B) Consumer uncertainty causes people to save more;consumption drops;equilibrium income and production drop;savings drop because income is lower.
C) The government encourages saving by raising interest rates;higher interest rates reduce investment spending,which lower equilibrium income and production drop;savings drop because income is lower.
D) As businesses save more,interest rates fall,thus reducing household savings.