ECONOMICS (CBSE/UGC NET)

ECONOMICS

AGGREGATE DEMAND

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Investment is the purchase of ____
A
Capital goods
B
Capital and consumer goods
C
Consumer goods.
D
Neither consumer or capital goods
Explanation: 

Detailed explanation-1: -The purchase of capital goods by a producer is called investment, since the finished goods produced using the capital goods such as machinery and tools will generate wealth for the producer.

Detailed explanation-2: -Capital investment occurs when businesses purchase capital goods, which are tangible assets such as buildings, machinery, equipment, vehicles, and tools. These tangible assets are then used to produce goods or services. Capital investment is a means for a company to further its business objectives.

Detailed explanation-3: -Key Takeaways Capital goods are physical assets that a company uses in the process to manufacture products and services that consumers will later use. Capital goods include fixed assets, such as buildings, machinery, equipment, vehicles, and tools.

Detailed explanation-4: -Capital goods are mostly fixed assets that are purchased by the producer in order to produce consumer goods. Examples: Buildings, equipment, machinery, furniture, and more.

Detailed explanation-5: -Capital goods are a particular form of economic good and are tangible property. A society acquires capital goods by saving wealth that can be invested in the means of production. People use them to produce other goods or services within a certain period.

There is 1 question to complete.