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Homework answers / question archive / The meaning of saving and investment Classify each of the following based on the macroeconomic definitions of saving and investment
The meaning of saving and investment
Classify each of the following based on the macroeconomic definitions of saving and investment.
Saving Investment
Bob buys a government bond.
Ginny purchases stock in Goohoo, an information
technology company.
Eric takes out a mortgage for a new home in Detroit.
Cho buys new bulldozers for her construction firm.
| Bob buys a government bond. | Savings | This is saving since bonds, as well as stocks, are intangibles. |
| Ginny purchases stock in Goohoo, an information | ||
| technology company. | Savings | This is saving since stocks are intangibles. |
| Eric takes out a mortgage for a new home in Detroit. | Investment | This is an investment since the property is considered a durable good. |
| Cho buys new bulldozers for her construction firm. | Investment | This is an investment. The new bulldozers are durable goods. |
