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Unformatted text preview: tment” a little differently than the
word is being used here. Am I right?
ANSWER: Yes, you are right. For example,
in the everyday world, someone might
say, “I made a good investment last
week. I bought stock in the stock market.” The economist, however, is not
using the word “investment” in this way.
Again, what an economist means when
he or she uses the word “investment” is
the expenditures made by a business—
for example, a business buying a factory,
or more robotics, and so on. These quarter figures for consumption, investment, and so on have been annualized. This means that for all practical purposes you
can consider these quarter figures to be fairly representative of the relevant annual figures. Think of it this way. Suppose that in the
first three months of the year (the first quarter of the year) you spend $400 on consumption goods. If you buy the same amount
in the next three quarters, your annual expenditure on consumption goods will be $1,200. So, when we say that the quarter figures
have been annualized, w...
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- Winter '14