Which of the following will occur if there is an increase in investment in the economy?
A) Both inﬂation and national output will fall.
B) Both inﬂation and national output will rise.
C) Inﬂation will rise, but national output will fall.
D) Inﬂation will fall, but national output will rise.

Question

Quizplus · Accepted Answer

An increase in investment in the economy typically leads to higher national output as businesses expand and produce more goods and services. This increased economic activity can also lead to higher demand, which may cause inflation to rise as prices increase in response to the greater demand.

Which of the Following Will Occur If There Is an Increase