Investment Flashcards
1
Q
what is gross investment
A
the spending on capital goods by firms and creates future production capacity
2
Q
what is net investment
A
the gross investment minus depreciation of capital assets
3
Q
what factors may cause a change in investment
A
consumer demand
corporation tax
interest rates
borrowing becomes easier or harder
4
Q
what is the accelerator effect
A
when there is an increase in investment that leads to an increase in AD
