Which of the following would not be classified as capital formation?
A)buying shares of stock
B)building a new warehouse
C)purchasing new construction equipment
D)All would be considered capital formation.

Question

Which of the following would not be classified as capital formation?
A)buying shares of stock 
B)building a new warehouse 
C)purchasing new construction equipment 
D)All would be considered capital formation.

Quizplus · Accepted Answer

Buying shares of stock would not be classified as capital formation as it does not involve the creation of new physical assets, but rather the acquisition of ownership in an existing company. Building a new warehouse and purchasing new construction equipment both involve investing in new physical assets, and as such are considered capital formation.

Which of the Following Would Not Be Classified as Capital