Economists say that investment occurs when
A) someone buys shares on the London or Paris or Frankfurt Stock Exchange, or any other stock exchange.
B) someone buys a government bond.
C) a firm increases its capital stock.
D) a government buys goods from another country.

Question

Quizplus · Accepted Answer

Investment occurs when a firm increases its capital stock. This can be done by purchasing new equipment, building new facilities, or otherwise expanding their operations. Buying shares on a stock exchange or government bonds can be a form of investment, but only if the proceeds are used to fund investment in productive assets. Government purchases of goods do not constitute investment.

Economists Say That Investment Occurs When