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Classify each of the following scenarios listed in the table below using the macroeconomic definitions of saving and investment.

The meaning of saving and investment

Classify each of the following scenarios listed in the table below using the macroeconomic definitions of saving and investment.

TransactionSavingInvestment
Beth purchases shares of stock in Bayzer, a pharmaceutical company.Correct
Teresa buys a new crane for her construction firm.Correct
Sam buys a government bond.Correct
Andrew takes out a loan and uses it to build a new cabin in Idaho.Correct

Explanation: 
- National saving is what's left over after you subtract household consumption and government spending from the economy's total income. 
- At the household level, saving is what's left over after subtracting taxes paid and consumption from household income. Depositing unspent income in a bank is an act of saving, as is using unspent income to purchase stocks or bonds. 

- Investment is spending on new capital, such as machines, equipment, tools, or buildings. Also note that spending on new residences is the one component of household expenditures that counts toward investment spending, rather than consumption, in national income accounting.

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