Determining the economy changes in given problem

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Reference no: EM131774147

Question: Suppose a report on CNN says that there is an impending recession coming in the United States. As a result, Bert's family, as well as many other like minded families and individuals, reduce their spending and instead fill up their piggy banks for a potential rainy day.

As a result of this behavior:

a) Nothing in the economy changes as a result of people choosing to save up some money.

b) The economy is actually harmed as there is a sharp decease in consumer spending.

c) The economy is stimulated as individuals begin to save up money and therefore have more money to spend on goods.

In macroeconomics, this result is known as:

a) self-regulation

b) a business cycle

c) normal behavior

d) piggy bank fattening

e) the paradox of thrift

Reference no: EM131774147

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