Fallacies in the reasoningSolutionSaving is good for an indi

Fallacies in the reasoning

Saving is good for an individual; but if everyone starts saving this is not good for the whole nation either.

In an economy where everyone saves money total demand of products, total income of people, and total savings would go down. This theory is known as fallacy of composition and it is harmful for an economy, what is good for an individual is not good in aggregate.