2.2.3: Investment

• Investment: Addition of capital stock to the economy
• Gross investment: Amount of investment without accounting depreciation
• Net investment: Gross investment - depreciation
• Influences on investment:

  Higher economic growth means more investment as firms are growing

  Higher confidence means more investment

  Higher interest rates mean less investment

  Higher access to credit means more investment

  Technological advancement increases investment

  Increased costs of production decrease investment
• Animal Spirits: Waves of emotion that influence investment by firms