Explain "Paradox of thrift' and how it affects the restoration of equi

1.	Explain "Paradox of thrift' and how it affects the restoration of equilibrium income in theeconomy.
Answer» The paradox Assuming that income has a direct EFFECT on saving, an increase in the autonomous component of saving, other things being EQUAL, will MOVE the equilibrium point at which income equals output to a lower value, thereby inducing a DECLINE in saving that may more than OFFSET the original increase.

Explain "Paradox of thrift' and how it affects the restoration of equilibrium income in theeconomy.

Answer»

The paradox

Assuming that income has a direct EFFECT on saving, an increase in the autonomous component of saving, other things being EQUAL, will MOVE the equilibrium point at which income equals output to a lower value, thereby inducing a DECLINE in saving that may more than OFFSET the original increase.

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Explain "Paradox of thrift' and how it affects the restoration of equilibrium income in theeconomy.​

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Explain "Paradox of thrift' and how it affects the restoration of equilibrium income in theeconomy.