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Questions and Answers
According to economics, investment is solely the buying of financial products for anticipated positive returns in the future.
According to economics, investment is solely the buying of financial products for anticipated positive returns in the future.
False (B)
Financial investments refer to the expectation of increasing the current economy's capital stock.
Financial investments refer to the expectation of increasing the current economy's capital stock.
False (B)
Economic investments imply the expectation of forming new and productive capital.
Economic investments imply the expectation of forming new and productive capital.
True (A)
Investment in the form of new constructions, plant and machinery, and inventories is considered a financial investment.
Investment in the form of new constructions, plant and machinery, and inventories is considered a financial investment.
Risk and return are not important considerations in the practice of investment.
Risk and return are not important considerations in the practice of investment.
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Study Notes
Definition of Investment
- Investment refers to the buying of financial products with the expectation of earning positive returns in the future.
Types of Investment
- Financial investments aim to increase the current economy's capital stock.
- Economic investments involve forming new and productive capital.
Forms of Investment
- Examples of investment include new constructions, plant and machinery, and inventories.
Important Considerations
- Risk and return are important considerations in the practice of investment.
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