Question

A higher rate of investment now will generate Multiple Choice more future inflation. more future production. more current consumption. more saving now.

Answer 1

Answer:

A higher rate of investment now will generate

more future production.

Explanation:

In the long run, the rate of investment will increase the economy's capacity to produce, thereby shifting the Long-run Aggregate Supply (LRAS) curve to the right.  An increase in investment shifts the LRAS curve to the right.  This implies that a higher rate of investment now increases the current inflation but generates more future production, more future consumption, and boosts Aggregate Demand and short-run economic growth.