Question

The meaning of saving and investment

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

1. Antonio purchases a corporate bond issued by a car company.
2. Dmitri takes out a loan and uses it to build a new cabin in Montana.
3. Frances purchases stock in NanoSpeck, a biotech firm.
4. Caroline buys new bulldozers for her construction firm.

Answer 1

Answer:

1. Saving

2. Investment

3. Saving

4. Investment

Explanation:

In macroeconomics, saving is when an individual's income is greater than consumption. Investment is when an individual purchases new capital. Dor example new machinery, car or house.

The purchase of a house and bulldozer is an investment because new capital is acquired.

The purchase of bond and stocks is savings because income isn't spent on consumption.

I hope my answer helps you