All of the following actions are investments in the sense of the term used by macroeconomists except:
A) IBM's building a new factory.
B) corner candy store's buying a new computer.
C) John Simpson's buying a newly constructed home.
D) Sandra Wu's buying 100 shares of IBM stock.

Question

Quizplus · Accepted Answer

Buying shares of a company's stock is not considered an investment in the sense used by macroeconomists because it does not increase the productive capacity of the economy. It only affects the financial market. In contrast, building a new factory, buying a new computer, and buying a newly constructed home are all considered investments because they increase the economy's capacity to produce goods and services.

All of the Following Actions Are Investments in the Sense