Larry buys stock in A to Z Express Company.Curly Corporation builds a new factory.Whose transaction would be an act of investment in the language of macroeconomics?
A)only Larry's
B)only Curly Corporation's
C)Larry's and Curly Corporation's
D)neither Larry's nor Curly Corporation's

Question

Quizplus · Accepted Answer

In macroeconomics, investment refers to the purchase of capital goods such as factories, equipment, and technology that will be used to produce goods and services in the future. Larry's purchase of stock in A to Z Express Company is not an investment in this sense since he is not providing funds directly to the company to purchase capital goods. On the other hand, Curly Corporation's building of a new factory is an investment as it involves the creation of new capital goods that will be used in production. Therefore, the correct answer is B, only Curly Corporation's transaction would be an act of investment in the language of macroeconomics.

Larry Buys Stock in a to Z Express Company