Economics help 2 multiple choice questions help!!?

1. Which would be considered an investment according to economists?

A. The purchase of newly-issued shares of stock in Microsoft
B. The construction of a new computer chip factory by Intel
C. The purchase of shares of stock by Fidelity, a mutual fund company
D. The sale of government bonds by the nation's central bank

2. From an economist's perspective, which is not considered to be an investment?

A. Construction of a new factory
B. Purchase of shares of company stock
C. The building of an apartment complex
D. Additions to inventories at steel plants

1 - B
2 - B

Buying bonds, stocks and shares would be a financial investment. Economist think of an investment as spending money on tools, factories or anything that would help you produce more goods and consequently, increase the wealth in the economy. If I buy the stocks of your company, that would be merely a transfer of money for a certain amount of time from my pocket to your pocket and would not necessarily result in a greater level of production.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.