Question

If a larger share of national output is devoted to investment, will living standards rise or fall?

Answer 1

Since as it has been given that if a larger share of national output is devoted to investment, then there will more production of goods and services as a result there will be more employment in the economy and the income of the people will increase and therefore the purchasing power of the people will also increase. Hence the demand for goods and services will increase. It leads to an increase in the living of standards of the people of the country.

Hence it can be stated that if a larger share of national output is devoted to investment, the living of standards will rise.