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19 February, 12:24

Classify each of the following based on the macroeconomic definitions of saving and investment.

A. Dina purchases stock in Pherk, a pharmaceutical company.

B. Charles purchases a new condominium in Miami.

C. Ana borrows money to build a new lab for her engineering firm.

D. Yakov purchases a certificate of deposit at his bank.

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  1. 19 February, 12:57
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    A : Stock - Investment; B : Condominium - Investment; C : Lab - Investment; D : Deposit Certificate - Savings

    Explanation:

    Saving is the amount set aside from income, so as to not get consumed & kept for further usage.

    Investment is the addition to capital stock during a period of time.

    A. Dina purchases stock in Pherk, a pharmaceutical company : is addition to financial capital stock - So, It is Investment

    B. Charles purchases a new condominium in Miami : is addition to real estate capital stock - So, It is Investment

    C. Ana borrows money to build a new lab for her engineering firm : is addition to firm capital stock - So, It is Investment

    D. Yakov purchases a certificate of deposit at his bank : reflects deposited savings set aside from consumption - So, It is Saving
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