Which of the following is the best example of investment as deﬁned by economists?
A) A restaurant owner buys a freezer to store ingredients for the restaurant meals.
B) A college professor buys a truck to drive around in.
C) A business manager purchases stock on the New York Stock Exchange.
D) A worker deposits money into a long-term retirement account.

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. In this context, a restaurant owner buying a freezer to store ingredients for restaurant meals is an investment because it is a purchase of capital equipment that will be used to produce goods (meals) in the future, thereby generating income. The other options do not fit the economic definition of investment as directly because they either pertain to personal consumption (B), financial investment without direct relation to production capacity (C), or saving rather than direct investment in productive capacity (D).

Which of the Following Is the Best Example of Investment