The Paradox of Thrift Is

question 32

Multiple Choice

The paradox of thrift is

• A) a concern of macroeconomists of all persuasions.
• B) a concern of the Keynesian economists that is enlarged if investment is positively correlated with GDP.
• C) not a concern of the new classical economists because of their belief that price adjustments always maintain actual GDP at its potential.
• D) really a fallacy of logic because higher saving produces higher investment, which produces greater aggregate demand and faster growth.
• E) b and c.

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