Asked by Sophie Hansen on May 27, 2024
Verified
Economists define investment to include
A) any increase in business inventories.
B) the addition of cash to a savings account.
C) the purchase of common or preferred stock.
D) the purchase of any durable good,e.g. ,an automobile or a refrigerator.
Economists Define
A phrase indicating the beginning of a definition or explanation of a specific economic term or concept as provided by economists.
Business Inventories
The total amount of goods and materials held by a business for the future sale, production, or utilization.
- Recognize the differences between various types of investments and financial instruments.
Verified Answer
JD
Jagdeep DhaliwalJun 02, 2024
Final Answer :
A
Explanation :
Investment, in economic terms, includes any increase in business inventories, as this represents goods produced but not yet sold, indicating a commitment of resources for future sales. Choices B, C, and D are not considered investments in the economic sense; adding cash to savings is saving, not investing, purchasing stocks is a financial investment but not in the economic sense of producing goods or services, and buying durable goods is consumption.
Learning Objectives
- Recognize the differences between various types of investments and financial instruments.