Which of the Following Most Clearly States the "Paradox of Thrift

question 94

Multiple Choice

Which of the following most clearly states the "paradox of thrift"?

• A) If households simultaneously attempt to increase their savings, the result may be a reduction in demand, output, and total savings.
• B) A strong, healthy economy can be achieved if most households are heavily in debt.
• C) A high savings rate will provide the funds for investment, which is a driving force of long-term economic growth.
• D) A reduction in savings and an increase in consumption will expand output and employment.

---

Definitions:

Perceptions

The way individuals interpret their sensory information, thereby understanding their environment and social interactions.

Developmental Opportunity

An opportunity for growth and learning in a professional or personal context, aimed at skill and career advancement.

Public Speaking

The act of delivering a speech or presentation in front of an audience, focusing on effective communication and engagement.

Self-understanding

Awareness and knowledge of one’s own character, feelings, motives, and desires, contributing to personal growth and development.