Step 1: Articulate the paradox.
The Paradox of Thrift, a concept introduced by Keynes, posits that an aggregate increase in individual saving efforts may not lead to a proportional increase in total economic savings.
Step 2: Explain the mechanism.
- Increased saving leads to reduced consumption.
- Reduced consumption results in lower aggregate demand.
- Diminished demand causes a contraction in output and income, thereby negating the intended rise in total savings.
Step 3: Disregard alternative explanations.
- (A) The Multiplier effect: This describes how an initial investment can generate a larger subsequent increase in national income.
- (C) Deficient demand: This refers to a general state of inadequate economic demand.
- (D) Investment: This specifically denotes expenditures on capital goods and is distinct from the paradox of saving.
Final Answer: \[\boxed{\text{Paradox of Thrift}}\]