If All of the Households and Businesses Start Saving More

question 116

Multiple Choice

If all of the households and businesses start saving more during economic hard times, then aggregate income will fall, hurting everyone in the economy. This is known as the:

• A) quantity theory.
• B) crowding-out theory.
• C) paradox of thrift.
• D) permanent income hypothesis.

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Definitions:

Exocrine

Pertains to glands that release their secretions through ducts onto an epithelial surface, such as sweat glands.

Goblet Cells

Specialized epithelial cells that secrete mucus to lubricate and protect the mucous membranes of the intestines and respiratory tract.

Serous Fluid

Fluid similar to lymph that is produced by and covers serous membrane; it lubricates the serous membrane.

Mucus

A slippery secretion produced by mucous membranes, serving to protect and lubricate surfaces.