True or False on Investment and Consumption

Study Notes

True or False Statements

Investment is not a key tool for economic development. (False)
Investment isn't related to the amount a consumer gives up in current consumption for the possibility of consuming more in the future. (False)
Income equals Y=CS. (True)
Investment decisions aren't critical for short and long-term financial management. (False)
Investment decisions involve decisions concerning working capital and fixed assets, or capital expenditure decisions, or investment budgets. (True)
Total spending is divided between consumption and investment. (True)
Total spending is divided between savings and investment. (False)
Consumption is the part of income allocated to spending on consumer goods. (True)
Savings is the part of income allocated to spending on consumer goods. (False)
Investment is the part of income allocated to spending on production goods. (True)
Investment is simply postponed consumption, where individuals or groups give up satisfying current consumption desires to secure funds for potential future consumption desires, without a willingness to take any risk. (False)
Savings is accumulating funds for future use, with no risks involved, and based on habits and inclinations, even if there are no profitable investment opportunities. (True)
Savings equals investments at every income level. (True)
What individuals intend to save may not be equal to what businesses intend to invest. (True)
Investment does not aim to achieve a suitable return for the individual, which helps maintain the project's continuity. (False)
Investment aims to maintain the real value of assets (financial and material) and overcome inflation and the decline in the purchasing power of the currency. (True)
Investment does not aim to ensure the continuity of income and increase it. (False)
Investment does not aim to ensure the availability of necessary liquidity. (False)
A goal of investment is retirement savings. (True)
Investment is vital to the economy, supporting economic and social development by increasing national income, employment, foreign trade, national production, and meeting individual needs. (True)
Investment increases production and productivity, leading to an increase in national income, an increase in per capita income, and an improvement in the citizens' standard of living. (True)
Investment does not contribute to increasing national income and improving the standard of living of citizens. (False)
Investment does not provide new job opportunities for citizens. (False)
Investment does not support the balance of trade and payments, nor does it increase the country's capital formation. (False)
Investment does not provide foreign currencies needed to purchase machinery and equipment and increase capital formation through the export of surplus of produced goods.(False)
Investment contributes to providing services to citizens and investors. (True)
Simply having surplus cash from individuals or businesses is enough to activate and sustain investment. (False)
A set of factors must be present to motivate those with surpluses to convert them into investments. (True)

Investment Decisions

Investment decisions are made by investors or senior management regarding the amount of funds to be spent on investment opportunities and the type of assets in which the funds will be invested. ( )
Capital assets are divided into long-term and short-term. (True)
Long-term capital asset decision is known as capital budgeting. (True)
Short-term capital asset decision is known as working capital management, dealing with highly liquid current assets in its nature. (True)
Investment triangle includes inputs (variables and internal information), outputs (choices made by the decision-maker), and feasibility studies and evaluation criteria. (True)
High awareness of investing negatively impacts the national economy. (False)

Other Points

Savings are funds accumulated for future use, often with some inherent risk, based on estimations and expectations of returns.
Investment and savings are not necessarily equal for an individual or group.
Total savings equal total investments at the societal level.
Savings = Available income – consumption expenditure. (The relationship between savings and investment).
Investment = Available income – Consumption expenditure. (The relationship between savings and investment)