ECONOMICS:PRIN.+POLICY-MINDTAP (1 TERM)
ECONOMICS:PRIN.+POLICY-MINDTAP (1 TERM)
14th Edition
ISBN: 9781337912396
Author: Baumol
Publisher: CENGAGE L
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Chapter 24, Problem 1DQ
To determine

Defining investment in two perspectives.

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Explanation of Solution

Generally, investment refers to the buying or accumulation of new capital goods such as tools, factories, and machinery for producing goods and services. However, ‘investment’ in the perspective of an economist is different from the general concept of investment. The economist will not use the terms of accumulation of new capital goods such as tools, factories, or machinery. According to an economist, investment is defined as the increase in capital stock.

Economics Concept Introduction

Investment: Investment refers to the buying or accumulation of new capital goods such as tools, factories, and machinery for producing goods and services.

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