Asked by Simer Sidhu on Jul 22, 2024
Verified
Which of the following would constitute an act of investment by a household, as economists use the term?
A) building a new construction vacation home
B) purchasing 100 shares of Microsoft stock
C) buying a corporate bond
D) borrowing money from the bank to pay for a vacation cruise
Investment
The allocation of resources, usually financial, into assets or projects expected to yield future returns.
Economists
Experts who study the production, distribution, and consumption of goods and services.
- Describe investment from an economic perspective and separate it from typical financial activities.
Verified Answer
PR
Patrice RICHARDSONJul 24, 2024
Final Answer :
A
Explanation :
Investment, in economic terms, refers to the creation of new capital goods, structures, or inventories. Building a new construction vacation home fits this definition as it involves the creation of a new asset. Purchasing stocks or bonds or borrowing money for consumption (like a vacation cruise) does not constitute investment in this context.
Learning Objectives
- Describe investment from an economic perspective and separate it from typical financial activities.
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