Question

Which of the following is not a real investment?

• A. Buying share
• B. Buying an old factory
• C. Construction of building
• D. Opening a deposit account in a bank

Hint:

Real investment refers to the creation or purchase of tangible assets that contribute to the production of goods and services, such as buildings, machinery, and infrastructure.

Answer 1

The Correct Option is D

Step 1: Understanding Real Investment:
Real investment refers to the creation or purchase of physical assets that contribute to the productive capacity of the economy. These investments lead to the production of goods and services, like buildings, machinery, and infrastructure.
Step 2: Analysis of Each Option:
- Buying share: This is a financial investment, where the investor purchases a portion of ownership in a company. It does not directly contribute to the production of goods or services, so it is not a real investment.
- Buying an old factory: This could be considered an investment if the factory will be used to produce goods and services. However, since the factory is old and not contributing to new production, it is more of a financial transaction rather than a real investment.
- Construction of building: This is a real investment because it involves the creation of a new physical asset that will contribute to economic productivity. A newly constructed building can house businesses, industries, or serve as infrastructure.
- Opening a deposit account in a bank: This is not a real investment because it simply involves placing money in a financial institution for safekeeping. It does not lead to the creation of any new physical assets or production capacity. Step 3: Conclusion:
Opening a deposit account in a bank does not contribute to the creation of physical assets or productive capacity, and thus it is not considered a real investment.