EBK ECONOMICS: PRINCIPLES AND POLICY
EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 9780100605930
Author: Blinder
Publisher: YUZU
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Chapter 25, Problem 1DQ
To determine

Defining investment in two perspectives.

Expert Solution & Answer
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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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