If all the people of the economy increase the proportion of income they save, the total value of savings in the economy will not increase - it will either decline or remain unchanged. This result is known as .......

Option 1 -> The multiplier mechanism explains how initial changes in spending create larger changes in national income, not the phenomenon described.

Option 2 -> The Paradox of Thrift is the exact concept where increased saving by all individuals leads to decreased or unchanged total savings in the economy.

Option 3 -> Deficient demand refers to insufficient aggregate demand to purchase all produced goods, which is a consequence but not the name of this phenomenon.

Option 4 -> Investment is a component of national income accounting and relates to savings, but doesn't describe this specific economic result.

Hence, Paradox of Thrift -> This Keynesian concept explains that when everyone simultaneously tries to save more, aggregate demand falls, reducing overall income and employment. As income falls, people's ability to save decreases, resulting in total savings remaining the same or even declining. While saving is virtuous for individuals, collective increased saving during economic downturns can be counterproductive for the economy as a whole, creating this paradoxical outcome-> correct