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.

---

Definitions:

Emotional Disturbance

is a classification used in educational settings to describe students who exhibit significant challenges in emotional and behavioral regulation.

Social Phobia

Extreme fear and/or avoidance of social situations.

Extreme Fear

A very intense and overwhelming sense of dread or terror that can significantly impact a person's psychological and physiological state.

Avoidance

The action of keeping away from or not doing something, often as a way to deal with fear or anxiety.