Investment Flashcards
Access to credit
The willingness and ability of financial institutions to lend funds to producers and consumers.
Animal spirits
The state of confidence or pessimism held by consumers and businesses.
Business confidence
Expectations about the future of the economy – vital in influencing business decisions about how much to spend on new capital goods and employment intentions.
Gross investment
Total investment calculated by adding new investment to replacement investment.
Interest rate
An interest rate is the cost or price of borrowing, or the gain from lending, normally expressed as an annual percentage amount.
Investment
Spending on capital goods including plant & machinery and infrastructure.
Investment income
Interest, profits and dividends from assets owned and located overseas.
Keynesian economics
The economics of John Maynard Keynes. The belief that the state can directly stimulate demand in a stagnating economy. For instance, by borrowing money to fund public works projects like new roads, housing, schools and hospitals
Net investment
Total investment minus replacement investment.
Replacement investment
The purchase of capital goods by firms to replace existing, worn out capital. It does not add to the total capital stock of an economy.
