A higher rate of investment now will generate
A) more saving now.
B) more current consumption.
C) more future production.
D) more future inﬂation.

Question

Quizplus · Accepted Answer

A higher rate of investment now will lead to more future production as it will result in the creation of more capital goods that can increase the economy’s productive capacity over time. This increased production can lead to increased economic growth and a higher standard of living in the future. Options A and B are incorrect as they are not the direct result of higher investment rates. Option D is also incorrect as higher investment rates do not necessarily lead to future inflation, although they may contribute to it if the economy overproduces and creates excess demand.

A Higher Rate of Investment Now Will Generate