The Paradox of Excessive Consumption Argues That When Households Spend

question 86

Multiple Choice

The paradox of excessive consumption argues that when households spend all they earn,

• A) actual output and potential output will be in equilibrium.
• B) the financial anxiety of families will be low.
• C) the economy will achieve rapid, sustainable growth.
• D) consumption can stagnate because families are in a poor position to deal with increases in debt and financial setbacks.

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