What is micro-macro paradox? give example.
- IF AN individual saves more ,he adds to his future prosperity .
if all people in an economy saves more and spend less ,demand for goods and services may decline .consequently ,investment decline ,production and employment level may fall .it may cause poverty rather than prosperity .....
i think this topic is deducted
pardox is a seemingly absurd or contradictory statement, though, often a true statement. sometimes, there are pardoxes seen in micro and macro activities. it means, an act which is benefical for an individual, may prove to be harmful for the economy as a whole.
eg. if individual saves, his family will be benefitted , but if the whole economy starts saving, it will result in contaction of demand, output, employement, and income. as a result, the whole economy will suffer.