In which scenario do you NOT contribute to investment?

Question

BlackTom AI · Accepted Answer

Examining the scenario presented, I’m going to evaluate each option in terms of whether it involves committing resources to create or enhance an asset or business capability.

Option a: You purchase pallets of bricks for your contracting business. This is a direct investment in inventory and equipment needed for future work. Buying materials that will be used to complete projects is a typical investment of capital aimed at generating future returns.

Option b: You produce extra units of your product to sell in the coming months. Increasing output usually requires more inputs, capacity, or processes, all of which represent an investment in production capacity and stock intended to boost future revenue.

Option c: You inherit a property from your grandparents. Inheritance involves receiving assets from others and does not require you to commit financial resources to create or expand a business or asset base. It is not an investment decision you made; rather, it is a transfer of ownership that occurred outside your spending choices, so it does not count as contributing to investment.

Option d: You renovate an old home into a bed and breakfast. Renovation typically involves spending money to improve and increase the value or income potential of a property, which is a classic form of investment aimed at future returns.

Across the options, the common thread of investment is the deliberate deployment of resources to generate future economic benefits. Inheriting a property (option c) stands out as the scenario where you are not actively contributing to investment through your own spending or decision-making, whereas the other options involve purposeful capital expenditure or capacity enhancement. The reasoning aligns with general financial and business investment concepts, where acquiring, upgrading, or expanding assets triggers investment activity.

MCD2090 Macroeconomics - Trimester 3 - 2025

In which scenario do you NOT contribute to investment?

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