30) Investment Flashcards
1
Q
How is investment defined in economics?
A
The spending by firms which increases the capital stock of an economy
2
Q
What factors affect the level of investment?
A
1) Interest rates
2) Economic growth
3) Costs
4) Capital consumption
5) Technological advances
6) Business expectations and confidence
7) Global economic performance
8) Access to credit
9) Retained profit
10) Political considerations (government)
3
Q
What are animal spirits?
A
Business confidence
4
Q
What is retained profit?
A
Profit kept back by a firm for its own use which is not distributed to shareholders or used to pay tax
