Economists Define Investment to Include

question 20

Multiple Choice

Economists define investment to include

• A)any increase in business inventories.
• B)the addition of cash to a savings account.
• C)the purchase of common or preferred stock.
• D)the purchase of any durable good,e.g. ,an automobile or a refrigerator.

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Definitions:

Net Working Capital

Represents a measure of a firm's liquidity by calculating the excess of current assets over current liabilities, portraying the company's operational efficiency.

Current Assets

Assets owned by a company that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle.

Current Liabilities

Short-term financial obligations that are due within one year, typically including accounts payable, short-term loans, and other debts.

Par Value

The face value of a bond or a stock, representing the amount of money that the holder will get back at maturity.