The Paradox of Thrift Will Not Arise If

question 43

Multiple Choice

The paradox of thrift will not arise if:

• A)increases in saving are translated into identical increases in investment.
• B)increases in saving are translated into identical decreases in consumption.
• C)decreases in saving are translated into identical increases in investment.
• D)decreases in saving are translated into identical decreases in consumption.

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Definitions:

Rationalizing

The cognitive process of making something appear reasonable or acceptable, often as a way of justifying one’s behavior or decisions.

Inconsistency

The quality of being inconsistent; not staying the same throughout.

Belief

An acceptance that something exists or is true, especially without proof, or the mental acceptance of and conviction in the truth, actuality, or validity of something.

Hindrance

An obstacle or barrier that prevents progress or makes it difficult to achieve a desider goal.