Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 13 - Saving, Investment, and the Financial System - Questions For Review: 4

Answer

Investment is the purchase of new capital such as equipment and buildings, such as factories or firms. This is similar to the value of spending in a closed economy because the money is only used for investment spending.

Work Step by Step

This question simply asks you to identify what is investment spending, one of the components of GDP.
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