Question

In: Economics

Indicate whether each of the following descriptions represents saving or investment, as defined by a macroeconomist....

Indicate whether each of the following descriptions represents saving or investment, as defined by a macroeconomist.

Description

Saving

Investment
This occurs when a person or firm purchasesd new capital.

( )

( )
This occurs when a person’s income exceeds his consumption.

( )

( )

Which of the following situations represent saving. Check all that apply.

You use your $200 paycheck to buy stock in AT&T. ( )

You borrow $1,000 from a bank to buy a car to use in your pizza delivery business. ( )

Your family takes out a mortgage and buys a new house.  ( )

Your roommate earns $100 and deposits it in his account at a bank. ( )

Solutions

Expert Solution

Saving occurs when a person's income is greater than his consumption whereas investment occurs when a person purhcases new capital,house,equipment etc.

Description

Saving

Investment
This occurs when a person or firm purchased new capital.

( Yes)
This occurs when a person’s income exceeds his consumption.

(Yes )

Which of the following situations represent saving. Check all that apply.

You use your $200 paycheck to buy stock in AT&T. ( Yes)

You borrow $1,000 from a bank to buy a car to use in your pizza delivery business. ( No)

Your family takes out a mortgage and buys a new house.  (No )

Your roommate earns $100 and deposits it in his account at a bank. ( Yes)

Rahul Sunny answered 3 years ago
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