What do you meant by investment, Macroeconomics

Assignment Help:

Q. What do you meant by Investment?

When we use the word investment, we characteristically mean 'gross investment'. Fundamentally, gross investment comprises all finished goods which we have produced though not consumed. The significant parts of gross investment are gross fixed investment and changes in inventories.

Gross fixed investment is total amount of investment in fixed capital. If a firm produces more than it sells in a certain period of time, its inventory will increase. This would be counted as a positive investment. Similarly we will have a negative inventory investment whenever inventories decrease. 

By net investments we mean gross investments minus depreciation such that actual increase in amount of capital between two periods in time is equal to net investment during this period. Keep in mind that whereas capital is a stock, investment is a flow. We may talk about a firm's total amount of capital at a certain point in time and a firm's total investment over a period of time.

2057_What do you meant by Investment.png

Figure


Related Discussions:- What do you meant by investment

Classical model and the long-term phillips curve, Q. Classical model and th...

Q. Classical model and the long-term Phillips curve? In classical model, L and real wage are determined from equilibrium conditions in the labor market. L and W/P, hence, are o

Spss , (I am providing them below) of Module 5 before beginning this assign...

(I am providing them below) of Module 5 before beginning this assignment.  You will have the opportunity to work through much of the assignment during the group activity for week 1

Price and output level, In the long run A. price and output levels are mut...

In the long run A. price and output levels are mutually dependent. B. the level of output depends on the price level. C. the level of output is independent of the price level.

Classical model, using a graph of the classical labour market,illustrate th...

using a graph of the classical labour market,illustrate the effects of a real wage existing in the market that is lower than the equilibrium real wage.What will eventually happen i

Help, Examine the graph below. The mayor has placed a $2 tax on the sale of...

Examine the graph below. The mayor has placed a $2 tax on the sale of each taco sold within the city. How large is the decrease in producer surplus?

Trade unions, what reasons limit the bargaining power of trade union in dev...

what reasons limit the bargaining power of trade union in developing countries

Define the monopoly of central banks, Define the monopoly of Central banks ...

Define the monopoly of Central banks The central bank has a monopoly on issuing currency, it is in complete control of the monetary base. In section 7.4.2 we will describe exac

Definitions for GDPand GNP, Why is GNP C+ I + G + (X- M)+ NR + NP. What is...

Why is GNP C+ I + G + (X- M)+ NR + NP. What is relationship between X - M and NR + NP

What do you mean by gross domestic product, What do you mean by Gross Domes...

What do you mean by Gross Domestic Product? Gross Domestic Product: GDP stands for Gross domestic product, measures the value of all concluding goods and services produce

How is economics work with interaction of individual choices, How is econom...

How is economics works with interaction of individual choices? Principles behind the interaction of individual choices: 1. There are gains through trade. • Specialization

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd