Which of the following is NOT a component of investment?

Question

Question

This question was previously asked in

SSC CHSL Exam 2023 Tier-I Official Paper (Held On: 10 Aug, 2023 Shift 4)

Answer 1

The correct answer is Money spent on purchasing shares of a company. Key Points

Investment is defined as the purchase of goods that are not consumed today but are used in the future to create wealth.
In addition to residential construction, machinery and equipment employed by a firm, and inventories of raw materials stocked by a firm are all components of investment as they are used to generate future income.
Money spent on purchasing shares of a company is not a component of investment as it does not directly create wealth or generate future income.
However, investing in shares can indirectly contribute to wealth creation through dividends and capital gains.
It is important to note that investment can take various forms, including financial assets like stocks and bonds, as well as physical assets like real estate and machinery.

Additional Information

Addition to residential construction: This is a component of investment as it involves spending money on building or improving a property, which can generate future income through rent or sale.
Machinery and equipment employed by a firm: This is a component of investment as it involves spending money on tools and equipment that can increase productivity and generate future income for the firm.
Inventories of raw materials stocked by a firm: This is a component of investment as it involves spending money on goods that can be used to produce finished products and generate future income for the firm.