The Paradox of Thrift Explains That Increased Savings by Households

question 107

True/False

The paradox of thrift explains that increased savings by households could actually lower savings for the economy as a whole.

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Definitions:

International Fisher

An economic theory stating that the difference in nominal interest rates between two countries is directly proportional to the expected change in the exchange rates between their currencies.

Strengthening

Generally refers to the process of becoming stronger or more firm, often used in financial contexts to describe currencies or economies that are improving in value or performance.

British Pound

The official currency of the United Kingdom, also known as GBP, symbolized by £.

Uncovered Interest Parity

A financial theory that posits that the difference in interest rates between two countries is equal to the expected changes in exchange rates between their currencies.