Explain the difference between saving and investment as defined by a macroeconomist.
Which of the following situations represent investment and which represent saving? Explain.
a. Your family takes out a mortgage and buys a new house.
b. You use your $200 paycheck to buy stock in AT&T.
c. Your roommate earns $100 and deposits it in his account at a bank.
d. You borrow $1,000 from a bank to buy a car to use in your pizza delivery business.

Macroeconomists believe that saving happens when an individual's income is greater than his or her consumption, while investing happens when an individual or corporation buys new capital, like a home or commercial property.

Describe the distinctions between saving and investment according to macroeconomic theory.

Buying a new home with a mortgage represents an investment because it involves the acquisition of additional capital.

b. You are saving money when you invest $200 of your paycheck in AT&T shares because you are not consuming anything.

c. Your roommate is saving when he earns $100 and puts it in his bank account rather than buying things he needs to live.

d. Taking out a $1,000 loan Because the car is a capital good, borrowing money from a bank to purchase one to utilize for your pizza delivery business qualifies as investment.

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