Which of the following does not constitute an act of "investment" as economists use the term?
A) The city council authorizes the construction of a new fire station.
B) A retiree buys 50 shares of stock at $10 a share and then sells the stock at a profit for $20 a share.
C) An accountant attends a seminar on changes in the federal tax code.
D) A department store increases its inventory of football jerseys before the Super Bowl.

Question

Quizplus · Accepted Answer

Investment, in economic terms, refers to the purchase of goods that are not consumed today but are used in the future to create wealth. Buying and selling stocks for a profit (choice B) does not fit this definition as it does not involve the purchase of goods for future wealth creation but rather represents a financial transaction aimed at capital gains. Choices A, C, and D involve spending on physical assets, education, and inventory, respectively, all of which are considered investments in economic terms.

Which of the Following Does Not Constitute an Act of "Investment