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Question
Increased saving is virtually a withdrawal from the circular flow of income. State true or false.
Increased saving is virtually a withdrawal from the circular flow of income. State true or false.
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Solution
The correct option is A True
Savings add to the income of the country. But as more and more individuals start saving and become thrifty, it impacts GDP adversely and income falls. This is known as the paradox of thrift. Hence the given statement is true.
True
Savings add to the income of the country. But as more and more individuals start saving and become thrifty, it impacts GDP adversely and income falls. This is known as the paradox of thrift. Hence the given statement is true.
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