Arrange the following statements in chronological order in respect to the increase in the proportion of income people save.

(A) Marginal propensity to consume decreases.
(B) The level of income decreases.
(C) The amount of savings remains the same.
(D) The aggregate demand curve shifts downwards.

Choose the correct answer from the options given below:

(A), (D), (B), (C)

The correct answer is Option (4) → (A), (D), (B), (C)

(A) Marginal propensity to consume decreases.  First, people save more, so their MPC (marginal propensity to consume) decreases.

(D) The aggregate demand curve shifts downwards. Because consumption is a major part of aggregate demand, and consumption has now decreased, the AD curve shifts downward.

(B) The level of income decreases. Lower AD leads to lower output and income in the economy (as per the multiplier mechanism).

(C) The amount of savings remains the same. This is the Paradox of Thrift — even though people tried to save more, the total savings do not increase because the national income fell.