If an economy wants to increase its current level of investment, it must
A) sacriﬁce future consumption.
B) print more money.
C) offer more stocks and bonds to ﬁnancial investors.
D) sacriﬁce current consumption.

Question

Quizplus · Accepted Answer

In order to increase current level of investment, the economy must allocate more resources towards investment goods, which can only come from reducing current consumption. Therefore, D - "sacrifice current consumption" is the correct answer. A is incorrect because sacrificing future consumption would not necessarily lead to an increase in current investment. B is incorrect because printing more money would likely lead to inflation rather than an increase in investment. C is incorrect because offering more stocks and bonds would not necessarily lead to an increase in investment, as demand for these financial instruments is dependent on a variety of factors.

If an Economy Wants to Increase Its Current Level of Investment