1991 Q.3
Investment takes place when
A. young people play more and study less.
B. people produce fewer perishable goods and more durable goods
C. companies issue new bonds
D. the interest rate falls.
The ans. is B, but I don't know why C is incorrect. Could anyone explain to me? thx~
AL economics-investment1991Q.3
2011-08-10 2:38 am
回答 (2)
2011-08-10 6:38 am
✔ 最佳答案
companies issue new bonds only imply the cash inflow to the company and the usage of cash is unknown. Hence, it may not relate to investment. 
2011-08-10 7:42 am
Actually, all are correct!!!
The reason is investment is defined as to forgive something( time now) to get something( income) in future! To forgive present consumption for more future income.
A. Play more is investment coz u forgive time of studying and play feel more happy, u may have more incentive to work after playing!
B. even u produce more perishable goods, it is investment!
Firework is an example!
C. IPO, why not?
D, interest rate falls, your cost of borrowing $ falls, investment increases!
only 1 situation investment doesnt take place. U have present consumption but not for generating more future income.
2011-08-09 23:43:14 補充：
1991 is Out C -.-''
The reason is investment is defined as to forgive something( time now) to get something( income) in future! To forgive present consumption for more future income.
A. Play more is investment coz u forgive time of studying and play feel more happy, u may have more incentive to work after playing!
B. even u produce more perishable goods, it is investment!
Firework is an example!
C. IPO, why not?
D, interest rate falls, your cost of borrowing $ falls, investment increases!
only 1 situation investment doesnt take place. U have present consumption but not for generating more future income.
2011-08-09 23:43:14 補充：
1991 is Out C -.-''
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