The "Paradox of Thrift" Refers to the Understandable Tendency of People

question 25

Multiple Choice

The "paradox of thrift" refers to the understandable tendency of people who are worried about their economic situation to their saving, but in aggregate this behaviour causes a recession.

• A)increase; more severe
• B)increase; shorter
• C)decrease; less severe
• D)increase; less severe
• E)decrease, more severe

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Definitions:

Gross Salary

The total earnings of an employee before any deductions like taxes and retirement contributions.

Accrued Benefits

Benefits earned or accumulated but not yet paid to employees or policyholders.

Employee Benefits Expense

Costs incurred by employers to provide benefits to employees, such as health insurance, pensions, and paid leave, beyond regular wages or salaries.

FICA Tax

Federal insurance contributions tax; a U.S. federal payroll tax imposed on both employees and employers to fund Social Security and Medicare.