CUET CUET Economics 2024 - Paradox of Thrift means : | PYQs + Solutions

CUET Economics 2024

Economics

Income & Employment

Hard

Paradox of Thrift means :

If all the people of the economy increase the proportion of income they save, the total value of investment in the economy will not increase, it will either decline or remain unchanged.

If all the people of the economy increase the proportion of income they spend, the total value of savings in the economy will not increase, it will either decline or remain unchanged.

If all the people of the economy decrease the proportion of income they save, the total value of savings in the economy will not increase, it will either decline or remain unchanged.

If all the people of the economy increase the proportion of income they save, the total value of savings in the economy will not increase, it will either decline or remain unchanged

Correct Option: 4

The term Paradox of Thrift refers to a situation where -> individuals increase savings, but -> national savings may not increase.

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Save more -> no increase in investment.

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Spend more -> no increase in savings.

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Save less -> no increase in savings.

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Save more -> decrease or same savings.

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Option 4 is correct: If all people -> increase savings proportion, then -> total savings will decrease or remain unchanged.

CUET Economics 2024 PYQs

Paradox of Thrift means :

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