What is the difference between economic investment and financial investment? Give an example for each type of investment
What will be an ideal response?
Economic investment is the purchase of new capital goods, such as machinery, tools or factories with the purpose to produce goods and services. The purchase of a construction crane is an example of economic investment. Financial investment refers to the purchase of assets like stocks and bonds for financial gain. The purchase of Google stock is an example of a financial investment. The main difference between these two types of investment is that financial investments involved simply the purchase or ownership of an asset, but does not contribute to the production of output as does an economic investment.
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A perfectly competitive firm maximizes its economic profit when it produces the quantity that sets
A) MR = MC. B) TR = TC. C) MC =.AVC. D) MC = ATC.
Using the income approach, general sales taxes, excise taxes, customs duties, business property taxes, and license fees are termed:
a. indirect business taxes. b. regressive taxes. c. disproportionate taxes. d. capital depreciation. e. progressive taxes.
Which of the following market structures describe an industry in which a group of firms formally agree to control prices and output of a product?
a. Perfect competition b. Oligopoly c. Cartel d. Monopoly
Why do CDs have lower rates of return than stocks?
A) CDs are much riskier investments than stocks. B) CDs are less risky than stocks. C) CDs are not taxed while stock s returns are taxable. D) CDs are not as liquid as stocks.