Author Question: The Paradox of Thrift states that: a. Any increase in saving by an individual will be offset by the ... (Read 170 times)

silviawilliams41 · **on:** Jun 30, 2018

The Paradox of Thrift states that:
a. Any increase in saving by an individual will be offset by the interactions of the Three-Sector-Model.
b.Saving by a nation (as a whole) is always good, while saving by individuals can lead to unexpectedly bad results.
c. A nation-wide increase in saving might cause GDP to fall and, in the end, reduce, or not increase,the actual amount of saving.
d. When a large portion of the market tries to de-lever its balance sheet, asset prices fall, thereby causing leverage to increase (not decrease).
e. If not fully understood by users and regulators, financial instruments that were created to increase saving can end up causing saving to fall.

Question 2

To put government debt into perspective, it should be:
a. Compared to a nation's balance on goods and services.
b. Adjusted for inflation to find the real debt.
c. Adjusted by any increase in wage rates caused labor union activity.
d. All the above.
e. None of the above.