12. ... the new consumption (C) is (a) 419.2 (b) 1700 (c) 480 (d) 2095 13. ...and the new saving level (S) is (a) 300 (b) 280 (c) -108.57 (d) -27.6 If you did these questions right, the new level of saving (S - DI - C) that you found in question 13, allowing for both the change in autonomous consumption and the change in equilibrium output, should be exactly the same as the level of saving that you calculated in question 8. That is, consumers cannot increase their saving in equilibrium by being thriftier by reducing A. This surprising fact about the Keynesian model is known as the Paradox of Thrift. 14. Intuitively, why does the paradox of thrift arise? That is, why doesn't saving rise when consumers try to be thriftier? (a) When consumers cut down on their autonomous consumption, aggregate demand falls (b) In the Keynesian Model, firms respond by producing less when there is less demand for their goods (c) In the Keynesian model, when output falls, so does disposable income (d) All of the above12. ... the new consumption (C) is (a) 419.2 (b) 1700 (c) 480 (d) 2095 13. ...and the new saving level (S) is (a) 300 (b) 280 (c) -108.57 (d) -27.6 If you did these questions right, the new level of saving (S - DI - C) that you found in question 13, allowing for both the change in autonomous consumption and the change in equilibrium output, should be exactly the same as the level of saving that you calculated in question 8. That is, consumers cannot increase their saving in equilibrium by being thriftier by reducing A. This surprising fact about the Keynesian model is known as the Paradox of Thrift. 14. Intuitively, why does the paradox of thrift arise? That is, why doesn't saving rise when consumers try to be thriftier? (a) When consumers cut down on their autonomous consumption, aggregate demand falls (b) In the Keynesian Model, firms respond by producing less when there is less demand for their goods (c) In the Keynesian model, when output falls, so does disposable income (d) All of the above