Question

Classify each of the following based on the macroeconomic definitions of saving and investment. Saving Investment...

Classify each of the following based on the macroeconomic definitions of saving and investment.

Saving

Investment

Hilary purchases new ovens for her cupcake-baking business.
Maria purchases stock in Goohoo, an information technology company.
Kevin takes out a mortgage for a new home in Detroit.
Edison purchases a corporate bond issued by a car company.
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Investment refers to purchasing capital goods to produce the goods and services which mean investment provide income in the future. Investment relates to real physical macroeconomic activity Saving refers to the income which is not spent. Savings relates to money and banking and savings also generate the income in the future 1. Hilary purchase new ovens for her cupcake-baking business. This statement relates to investment, because Hilary is purchasing capital goods which mean he is purchasing physical goods. 2. Maria purchase stock in Goohoo, an information technology company. This directly 3. Kevin takes out a mortgage for a new home in Detroit. This statement relates to investment 4. Edison purchases a corporate bond issued by a car company. This statement relates to saving.

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