Investment is defined as the purchase of
A)any financial asset only.
B)additions to inventories only.
C)financial assets and inventories only.
D)the purchase of new capital goods and additions to inventories.
E)the purchase of new capital goods but not additions to inventories.

Question

Quizplus · Accepted Answer

Investment is the purchase of new capital goods and additions to inventories. It involves the purchase of physical assets that are used to produce goods and services in the future. Thus, options A, B, and C are incorrect as they limit investment to financial assets and/or inventories only, while investment also includes the purchase of new capital goods. Option E is also incorrect as it excludes additions to inventories, which are an important aspect of investment.

Investment Is Defined as the Purchase of