Question

Classify each of the following based on the macroeconomic definitions of saving and investment.

a. Saving Investment Kate purchases stock in Pherk, a pharmaceutical company.
b. Hubert purchases a new condominium in Houston.
c. Clancy purchases a certificate of deposit at his bank.
d. Eileen borrows money to build a new lab for her engineering firm.

Answer 1

a. Savings

b. Investment

c. Savings

d. Investment

Step-by-step explanation:

Remember,

In macroeconomics, we often see Investments as purchases made with the aim of producing more goods or more wealth in the future. The examples are;

- Kate purchases stock in Pherk, a pharmaceutical company.

-Hubert purchases a new condominium in Houston.

While, Savings refers to the extra money a households have left after paying all their other expenses. Examples here are:

- Clancy purchases a certificate of deposit at his bank.

- Eileen borrows money to build a new lab for her engineering firm.