Investment Flashcards
1
Q
Investment def.
A
Spending on capital goods (machinery, buildings etc.) that will aid the production of goods and services
2
Q
Gross vs Net investment
A
gross investment is total expenditure on investment in a period of time, while Net investment is gross investment - depreciation (loss in value of the Capital Stock over time [Machine stops working etc.] )
3
Q
determinants of investment
5
A
Business confidence
Interest rates (if low, more likely to invest)
Credit availability
Capital to Output ratio
Gov. policy (e.g. reduction in Corp. Tax)
