Final answer:
Businesses investing in inventory and equipment is indeed considered investment, similar to individuals investing in stocks or bonds, and is crucial for economic growth and future profit generation.
Step-by-step explanation:
True, the commitment of funds by a business into inventory, equipment, and like assets is an investment, much like an individual's purchase of stocks or bonds. Businesses invest in these assets with the expectation of generating future profits, similar to how individuals invest in financial securities anticipating returns.
During an economic expansion, firms tend to increase their business investment to meet rising consumer demand and take advantage of increasing profits. Despite economic fluctuations, companies continue to deploy substantial funds toward new equipment and structures. For instance, in the 2009 economy, U.S. firms invested $1.4 trillion in such assets, aiming to generate profits in later years. These investments play a pivotal role in sustaining economic growth. Also, financial markets allow for various forms of raising capital such as loans, bonds, and stock sales which facilitate these business investments.