Impacting the housing and retail markets

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Question: Give an example of the paradox of thrift. An example of the paradox of thrift can be seen during the Great Recession. As people saved more due to economic uncertainty, consumption decreased. For instance, if a person saves $100 each month by not dining out, it reduces income for restaurant staff, who then reduce their spending. This ripple effect can decrease overall demand and lower incomes, harming the economy. Another example is young adults moving back with their parents to save on living expenses, reducing the formation of new households and impacting the housing and retail markets. reply to this discussion post

Reference no: EM133710928

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