1.1 Meaning and Concept of Investment (Test)

1. Which statement best defines investment?
A. Consumption of all available income
B. Commitment of resources for anticipated future benefits
C. Collection of government revenue
D. Purchase of goods for immediate use

2. Which of the following is not a basic element of investment?
A. Expected return
B. Time period
C. Risk
D. Guaranteed success

3. From a national economic perspective, investment should:
A. Increase productive capacity
B. Reduce capital formation
C. discourage industrial activity
D. Increase present consumption only

4. Expenditure on infrastructure is classified as:
A. Productive investment
B. Personal consumption
C. Transfer payment
D. Tax expenditure only

5. Which return may an investor receive from shares?
A. Rent only
B. Dividend
C. Customs duty
D. Subsidy withdrawal

6. Higher expected investment returns are generally associated with:
A. Lower time requirements only
B. Greater risk
C. Guaranteed profitability
D. No uncertainty

7. Investment made by local individuals or enterprises is known as:
A. Foreign investment
B. Portfolio regulation
C. Domestic investment
D. External borrowing

8. Which objective is commonly associated with investment policy?
A. Preventing capital formation
B. Creating a predictable business environment
C. Eliminating private enterprises
D. Increasing administrative uncertainty

9. Investment in education and professional skills is called:
A. Inventory investment
B. Human-capital investment
C. Portfolio withdrawal
D. Consumer financing

10. Productive investment can support Pakistan’s economy through:
A. Industrialization and employment creation
B. Declining production
C. Reduced technological development
D. Elimination of exports

Answer Key

1. B
2. D
3. A
4. A
5. B
6. B
7. C
8. B
9. B
10. A