In the language of macroeconomics,investment refers to
A)saving.
B)the purchase of new capital.
C)the purchase of stocks,bonds,or mutual funds.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

In the language of macroeconomics, investment refers to the purchase of new capital goods, such as machinery, equipment, tools, and buildings, that are used to produce goods and services in the future. Thus, saving and investing are not the same things: saving refers to the portion of income that is not spent on consumption, whereas investing refers to the allocation of saved income to productive uses. Buying stocks, bonds, or mutual funds is a form of financial investment, but it is not considered investment in the sense used by macroeconomists, because it does not create new physical capital.

In the Language of Macroeconomics,investment Refers to