What is the oppurtunity cost of increasing investment to a fully employed economy?
a) A Fall in consumption
That's the answer. Why? Please explain. Thanks! :)
- LawLessLv 49 years agoFavorite Answer
This is because you are actually increasing labor costs and will be paying more to everyone by increasing investment in a country fully employed. This will ultimately lead to increase in overall consumption as people will have more money to spend..
so the answer is fall in consumption because it occurs when there is reduction in investment. and is the next best alternative.
- Anonymous9 years ago
To increase investment, the country has to save more. Saving is a loanable fund for investment.To save more by given disposable income, people have to reduce consumption.