Final answer:
If society increases investment and reduces consumption, the long-term effect on the economy is likely an increase in growth due to enhanced productive efficiency and output. Short-term tradeoffs may occur, but increased investment generally promotes higher growth rates.
Step-by-step explanation:
If society decided to reduce consumption and increase investment, the effect on the economy would generally be an increase in growth in the long run. When investments are made, they often fund the development of new technologies, infrastructure, and capital, which enhances productive efficiency. Although these changes can take time to implement and for economic growth to materialize, increased investment in productive capital can lead to higher levels of output and income in the future. This process is facilitated by both the government and market economy, where government policies can promote investment, and the market economy can allocate resources efficiently towards productive ventures.
However, it's important to consider that such a decision would involve tradeoffs. For example, increased investment may mean reduced consumption in the short term, which could potentially slow down the economy temporarily. In the long term, though, as productive capacity increases, the overall economy is likely to grow, leading to more jobs, higher incomes, and increased standards of living.
In summary, based on the assumption that an increase in investment leads to economic growth, option 2) The economy will experience an increase in growth is the most likely outcome. The increase in investment can increase production capacity and improve productivity, which eventually contributes to economic growth. However, the assumption must hold that the investment is in productive areas of the economy that lead to an increase in the production of goods and services.