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22 June, 09:04

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

1. Kate borrows money to build a new lab for her engineering firm.

2. Manuel purchases a new condominium in Detroit.

3. Hubert purchases a corporate bond issued by a car company.

4. Poornima purchases stock in Goohoo, an information technology company.

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  1. 22 June, 12:09
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    All four reflect Investment

    Explanation:

    Saving is portion of income kept aside from consumption, for further precautionary purposes.

    Investment is the addition to capital stock of by a person or enterprise.

    'Kate borrows money to build a new lab for her engineering firm' : is an Investment as it adds capital stock i. e lab in his engineering firm Manuel purchases a new condominium in Detroit : is an Investment as it is addition to his real estate capital stock Hubert purchases a corporate bond issued by a company : is an investment as it is addition to financial capital stock Poornima purchases stock in Goohoo, an IT company : is an Investment as it is addition to financial capital stock
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