An increase in investment __________. lowers interest rates increases current consumption expands the productive capacity of the economy leads to inflation

An increase in investment typically expands the productive capacity of the economy. Increased investment means businesses are spending more on capital goods, such as machinery and equipment, which can enhance productivity and contribute to economic growth.

The other options are not necessarily direct outcomes of an increase in investment:

• Lowering interest rates: While increased investment might be associated with lower interest rates, it's not a universal rule. Interest rates are influenced by various factors, including central bank policies and overall economic conditions.
• Increasing current consumption: Investment and consumption are distinct components of economic activity. While increased investment can contribute to overall economic growth, it doesn't necessarily lead to an immediate increase in current consumption.
• Leading to inflation: While increased demand in the economy can contribute to inflation, it depends on various factors. If the increase in investment is met with increased production and supply, it may not necessarily lead to inflation. Inflation is influenced by the overall balance between supply and demand in the economy.