Question

Classify each of the following based on the macroeconomic definitions of saving and investment. Saving Investment a.Kyoko borrows money to build a new lab for her engineering firm. b.Rina purchases stock in NanoSpeck, a biotech firm. c.Musashi takes out a mortgage for a new home in Detroit. d.Jacques purchases a corporate bond issued by a car company.

Answer 1

The classification is shown below:

Step-by-step explanation:

The saving refers to the amount which is exceeded than its consumption expenditure

let us take an example if an individual salary is $20,000 and his expenditure suppose $5,000 so it saving is $15,000

While the investment is the amount i.e invested to purchase some assets in terms of building, equipment, house, etc

So the classification is as follows

a. Kyoko borrows money to build a new lab for her engineering firm. = Investment

b. Rina purchases stock in Nano Speck, a biotech firm. = saving

c. Musashi takes out a mortgage for a new home in Detroit. = investment

d.Jacques purchases a corporate bond issued by a car company. = saving