Explain the difference between savings and investment as defined by macroeconomists. Which of the following situation represent investment? Saving? Explain. Savings is that part of income which is not consumed while investment is the expenditure made by individuals on non-consumption goods.
a. You borrow from a bank and use the money to construct a garage for your car.
b. David Letterman spends $20 million to buy a mansion built in 1950.
c. You earn $200 and deposit it in your bank account.
d. Rachel buys 100 shares of existing Microsoft stock.