Question

Which of the following can be defined as saving, according to economics? a. Andrea finances her new car through an auto loan. b. Microsoft sells stock at an initial public offering. c. General Motors issues corporate bonds. d. Sandra purchases a certificate of deposit from a bank.

Answer 1

Answer:

Option c. General Motors issues corporate bonds.

Explanation:

The corporate bonds are bonds that are used by companies as a way of raising capital. In essence, a corporate bond is a bond that is issued by a large corporation mainly for the purposes of financing of a project. In addition, the bonds are also a means of business expansion. Thus, general motors, in its action, is raising capital for later expansion.  

Answer 2

Answer:

c. General Motors issues corporate bonds.

Explanation:

Savingi defined as a process of setting aside a portion of current income for future use, or the flow of resources accumulated in this way over a given period of time. Saving may take the form of increases in bank deposits, purchases of securities, or increased cash holdings. It is also defined in simple terms as disposable income that is not spent.

Corporate bonds are debt instruments created by companies for the purpose of raising capital. They are called fixed-income securities because they pay a specified amount of interest on a regular basis. Bonds are evidenced by an instrument typically issued by a company or country in exchange for cash, they pay the highest yield because they offer more risk.