8 The terminology of technological advancement The discovery

8. The terminology of technological advancement The discovery of a product or process is called invention ? . Charles, the president of a company that makes electronic devices, borrows a large sum of money from the local bank to purchase new, automated technology to make a new series of laptop computers. This new generation of laptops is expected to drive desktop computers out of the market. As depicted in the above scenario, which of the following is an example of investment? Desktop computers becoming obsolete due to the introduction of this new series of laptops O The new automated technology used to create the laptops The purchase of new technology used to make the new series of laptops

Solution

Invention is correct because innovation will make changes in existing product.

Investment is the purchase of goods and services that are going to serve in future. In this sense, investment is not the good itself but the purchase of such good. Hence the last option is correct (Purchase of new technology).