Classify each of the following based on the macroeconomic definitions of saving and investment.

1. Kate borrows money to build a new lab for her engineering firm.

2. Manuel purchases a new condominium in Detroit.

3. Hubert purchases a corporate bond issued by a car company.

4. Poornima purchases stock in Goohoo, an information technology company.

Question

Regina Moran

Business

4 January, 10:29

Classify each of the following based on the macroeconomic definitions of saving and investment.

1. Kate borrows money to build a new lab for her engineering firm.

2. Manuel purchases a new condominium in Detroit.

3. Hubert purchases a corporate bond issued by a car company.

4. Poornima purchases stock in Goohoo, an information technology company.

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Answers (1)

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Dana Sparks · Answer 1

All four reflect Investment

Explanation:

Saving is portion of income kept aside from consumption, for further precautionary purposes.

Investment is the addition to capital stock of by a person or enterprise.

'Kate borrows money to build a new lab for her engineering firm' : is an Investment as it adds capital stock i. e lab in his engineering firm Manuel purchases a new condominium in Detroit : is an Investment as it is addition to his real estate capital stock Hubert purchases a corporate bond issued by a company : is an investment as it is addition to financial capital stock Poornima purchases stock in Goohoo, an IT company : is an Investment as it is addition to financial capital stock