Question

Maxwell is opening up a restaurant. He wants to raise money to

purchase inventories for his business. He does this by borrowing $5,000 from Jenna.
Maxwell wrote Jenna a note saying that he will pay Jenna $5,000 in a year. Every month, he
will also pay Jenna $50.
Jason heard about the new restaurant and wanted to invest in it. He agreed to give Maxwell
another $5,000 in exchange for 1/10 profit of Maxwell’s business.
Which statement is true? Choose all that applies.

1. Economists consider Jason’s money as investment and Jenna’s money as saving.

2. Economists consider Maxwell’s usage of money as investment.
3. Economists consider both Jason’s and Jenna’s money as investment.
4. Economists consider both Jason’s and Jenna’s money as saving.

Answer 1

Economists consider Jason's money as investment and Jenna's money as saving. Economists consider Maxwell's usage of money as investment.

Step-by-step explanation:

The correct statements are:

1. Economists consider Jason's money as investment and Jenna's money as saving.
2. Economists consider Maxwell's usage of money as investment.

Economists consider Jason's money as investment because he is providing funds to the business in exchange for a share of the profits. This is a form of investment where he expects to earn a return on his investment.

Economists consider Jenna's money as saving because she is lending money to Maxwell and will receive the principal back with interest at a later date. This is considered saving because Jenna is not directly involved in the business and does not expect to earn a share of the profits.

Economists consider Maxwell's usage of money as investment because he is using the funds to purchase inventories for his business. This investment will be used to generate revenue and grow the business.