Based on Our Understanding of the Paradox of Saving, We

question 11

Multiple Choice

Based on our understanding of the paradox of saving, we know that a decrease in the desire to save will cause:

• A) a decrease in equilibrium output.
• B) an increase in equilibrium output.
• C) an increase in the desire to invest.
• D) a permanent decrease in the level of private saving.
• E) no change in equilibrium output.

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Definitions:

Positive Economics

The branch of economics that focuses on factual and cause-and-effect relationships, avoiding value judgments about what ought to be.

Prescriptions

Authorized orders for medication given by a licensed healthcare professional, allowing a patient to be provided medicine.

Factor Of Production

Resources used in the creation of goods and services, traditionally categorized into land, labor, capital, and sometimes entrepreneurship.

Fertilizer

A chemical or natural substance added to soil or land to increase its fertility and enhance plant growth.