Question

Which of the following is an example of economic investment?

Answer 1

Answer:

Nike buys a new machine that increases shoe production.

Explanation:

An economic investment is when you pay for new additions to the capital stock or new replacements for capital stock that has worn out.

It refers to the net additions to the capital stock of the society which consists of goods and services that are used in the production of other goods and services.

Addition to capital stock means an increase in buildings, plants equipments and inventories over the amount of goods and services that existed.