Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 24, Problem 1DQ
To determine
Defining investment in two perspectives.
Expert Solution & Answer
Explanation of Solution
Generally, investment refers to the buying or accumulation of new capital goods such as tools, factories, and machinery for producing goods and services. However, ‘investment’ in the perspective of an economist is different from the general concept of investment. The economist will not use the terms of accumulation of new capital goods such as tools, factories, or machinery. According to an economist, investment is defined as the increase in capital stock.
Economics Concept Introduction
Investment: Investment refers to the buying or accumulation of new capital goods such as tools, factories, and machinery for producing goods and services.
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Classify each of the following based on the macroeconomic definitions of saving and investment.
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Chapter 24 Solutions
Economics: Principles & Policy
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