Unformatted text preview: 3. The meaning of savlng and Investment Classify each of the following based on the macroeconomic deﬁnitions of saving and Investment, Ginny buys new bulldozers for her construction ﬁrm. can purchases shock in Goohou. an Information technology company.
Stan takes out a loan and uses it to build a new cabin in New Brunswick. Explanation: Investment ‘1' Saving J Investment v' MA Recall that national saving ls what's left over after you subtract household consumption and government spending
from the economy's total Income. At the houseth level, saving Is what’s Ieﬁ over alter subtracting tame: paid and
consumption from household income. Depositing unspent income In a bank or using it no purchase stocks or bonds are acls of saving. Investment ls spending on new capital, such as machines, equipment. tools, or buildings. Recall that spending on
new residences Is the one component of household expenditures that counts toward Investment spending rattler than consumption in national Income accounting. ...
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- Fall '08