In economics parlance,the term investment refers to:
A)the cost of employing human capital.
B)expenditure on expense accounts of employees.
C)the expenditure incurred on salaries and rent.
D)business spending for acquiring capital goods.
E)the expenses on the purchase of stocks of a corporation.

Question

Quizplus · Accepted Answer

Investment in economics refers to the expenditure of resources to acquire capital goods for production or future benefits. It involves spending on factors of production such as land, labor, and capital equipment to increase productivity and output. Therefore, choice D, business spending for acquiring capital goods, best describes the definition of investment in economics. Choices A, B, and C are not investment as they describe expenses on factors of production and not the acquisition of capital goods. Choice E refers to the purchase of stocks, which is more related to portfolio investments, rather than the investment in physical capital goods for production.

In Economics Parlance,the Term Investment Refers To