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Macroeconomics/Investment
Reference material by Wikibooks contributors. This retains its source identity and is not 411 news reporting.
Investment
Investment is the expenditure(E) on new capital equipment which will be used to produce final goods & services(g+s) in the future. It includes building construction, housing, etc.
Factors Affecting Investment:
The level of I is the most volatile component of AE, particularily because it is forward planning/focused.
Determinants
The level of investment in the economy is determined by:
(T) → Taxation
(W) → World events
(I) → Inflation
(G) → Government policies
(I) → Interest rates
(S) → Stocks
(P) → Past profits
(E) → Expectations
(C) → Competition
think TWIGISPEC!
Private sector investment comprises 10-20% of AE.