In the fall of 2008, the global financial crisis set off fears of a recession. As the financial markets and stock prices collapsed, households, fearing a recession, began to save more. The Keynesian model predicts that the result of households increasing saving to protect themselves from the expected recession can cause a recession to occur.

How would it be possible for increased saving to cause a recession in the Keynesian model? Explain using the simple fixed price Keynesian model.