According to _____ If the marginal propensity to save in the economy increases, the total value of saving in the economy will not increase.

Paradox of Thrift

The correct answer is Option (4) → Paradox of Thrift

According to the Paradox of Thrift, if everyone in the economy tries to save more (i.e., an increase in the marginal propensity to save), it leads to a decrease in aggregate demand, which reduces income and output. As a result, the total value of actual savings may not increase, and can even decrease. This paradox highlights that what is good for an individual (saving more) may be harmful for the economy when done collectively.