Question

3. Problems and Applications Q3

Indicate whether each of the following descriptions represents saving or investment, as defined by a macroeconomist.

Description	Saving	Investment
This occurs when a person or firm purchasesd new capital.
This occurs when a person’s income exceeds his consumption.

Indicate whether each of the following situations represents saving or investment.

Situation	Saving	Investment
Your family takes out a mortgage and buys a new house.
You use your $200 paycheck to buy stock in AT&T.
Your roommate earns $100 and deposits it in his account at a bank.
You borrow $1,000 from a bank to buy a car to use in your pizza delivery business.

Answer 1