An example of investment spending is the purchase of a:
A) bond by a banker.
B) loaf of bread by your aunt.
C) new tractor by a farmer.
D) ticket to a football game by a student.

Question

Quizplus · Accepted Answer

Investment spending refers to the purchase of capital goods or equipment that is used to produce other goods and services. A new tractor by a farmer is an example of investment spending because it is a capital good that will be used in agricultural production. The purchase of a bond by a banker, a loaf of bread by your aunt, or a ticket to a football game by a student are not examples of investment spending as they do not involve the purchase of capital goods or equipment for production purposes.

An Example of Investment Spending Is the Purchase of A