Aggregate Demand - Investment Flashcards

1
Q

Define: Gross investment

A

Simply the total investment made in a time period

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2
Q

DefineL Net investment

A

Accounts for depreciation of assets over time. If certain capital goods need to be replaced, then these are deducted from gross investment

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3
Q

_____ investment = Gross investment - Depreciation

A

Net

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4
Q

Determinants of investment

A
Economic growth
Business expectations and confidence
Demand for exports
Interest rates
Access to credit
Influence of government and regulations
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5
Q

If demand for exports rises, _______ investment is required to meet the new demand

A

More

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6
Q

Low interest rates make borrowing easier and should _________ investment, while higher interest rates increase the cost of borrowing and make saving money _______ attractive than other investment projects

A

Increase

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