Question

The meaning of saving and investment Classify each of the following based on the macroeconomic definitions of saving and investment. Saving Investment Frances buys new bulldozers for her construction firm. Jake takes out a loan and uses it to build a new cabin in Montana. Latasha purchases stock in Goohoo, an information technology company. Dmitri purchases a corporate bond issued by a car company.

Answer 1

Answer:

1. France buys new bulldozers for her construction firm : Investment
2. Jake takes out a loan and uses it to build a new cabin in Montana :Investment
3. Latasha purchases stock in Goohoo An information technology company : Saving
4. Dmitri purchases a corporate bond issued by a car company : saving

Explanation:

Based on the macroeconomic definitions of saving ( setting aside money to be used later after investing) and investment ( purchasing of assets in expectancy of making profits from it ) the following statements can be classified into savings and investment:

France buys new Bulldozers for her construction firm ( investment ) this is because the new bulldozers bought will be used for the production of goods and services and generation of profits in the long run

Jake taking out a loan to build a cabin is an investment plan because the Cabin are durable and not consumed immediately but used for production of more goods and services

Latasha purchasing a stock is a savings plan because before buying the stock Latasha must have set outside the money after making her investments

Dmitri purchasing a bond is also a savings plan to reserve excess money after expenses