Economists use the word investment to refer to the portion of income that is:
A. placed in an individual's savings account.
B. spent on productive inputs, such as factories, machinery, and inventories.
C. not immediately spent on consumption of goods and services.
D. in any interest-bearing account.
Answer: B
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Refer to the figure above. If tastes were to change so that S became more preferred relative to T, then, in autarky, production and consumption would move from their initial equilibrium to a point such as
A) C. B) D. C) E. D) F.
The price of video cassette recorders (VCRs) remains constant, but the market demand curve for VCRs shifts leftward as consumers shift to DVDs and other video technologies
What happens to the consumer surplus in this market as the demand curve shifts? A) Increases B) Decreases C) Remains the same D) We do not have enough information to answer this question.
The price of oranges rises. What happens in the market for apples, which are a substitute for oranges?
A) The equilibrium price falls, and the equilibrium quantity rises. B) The equilibrium price rises, and the equilibrium quantity falls. C) The equilibrium price and quantity rise. D) The equilibrium price and quantity fall.
The risk of a borrower defaulting on a loan is known as:
A. default risk. B. credit risk. C. loan risk. D. asset risk.