The paradox of thrift says that the more people try to save, the more
a. income rises, causing saving to rise more than intended
b. consumption falls, causing saving to rise by more than intended
c. consumption rises, causing saving to fall
d. income falls, causing saving to remain unchanged or even fall
e. income rises, causing saving to fall
D
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Because skills are costly to obtain, at a given wage rate, the
A) quantity demanded of high-skilled labor is less than the quantity demanded of low-skilled labor. B) quantity demanded of high-skilled labor is greater than the quantity demanded of low-skilled labor. C) quantity supplied of high-skilled labor is less than the quantity supplied of low-skilled labor. D) quantity supplied of high-skilled labor is greater than the quantity supplier of low-skilled labor.
If firms and workers have rational expectations, including knowledge of the policy being used by the Federal Reserve, the short-run Phillips curve will be
A) vertical. B) flatter in the long run than it is in the short run. C) negatively sloped. D) positively sloped.