Who coined the concept of ”Paradox of Thrift”?

Adam Smith
Alffed Marshall
John Maynard Keynes
Paul A. Samuelson

The correct answer is (c), John Maynard Keynes.

The paradox of thrift is a situation in which an increase in overall savings may actually lead to a decrease in aggregate demand and therefore economic growth. This is because when people save more, they spend less, which reduces the demand for goods and services. This can lead businesses to cut back on production, which can lead to job losses and further reductions in demand.

The paradox of thrift was first described by John Maynard Keynes in his book “The General Theory of Employment, Interest and Money” (1936). Keynes argued that in a recession, the government should increase spending in order to stimulate the economy. This would increase aggregate demand and lead to economic growth.

Adam Smith (a) was a Scottish economist and philosopher who is considered the father of modern economics. He is best known for his book “The Wealth of Nations” (1776), which is considered one of the most important works of economic theory ever written.

Alfred Marshall (b) was an English economist who is considered one of the founders of neoclassical economics. He is best known for his book “Principles of Economics” (1890), which is considered one of the most important works of economic theory ever written.

Paul A. Samuelson (d) was an American economist who is considered one of the most influential economists of the 20th century. He is best known for his book “Economics” (1948), which is considered one of the most widely used textbooks in economics.

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