Types of Investment in Economics

What is Investment?

Investment means buying the financial assets that will give returns on their money.The investment made with goal of that the goods or services that is not consuming today it will be consumed in future.The main goal of the investment is to generate more income or appreciation in future.

Types of Investment in Economy

There are many types of Investment in Economy. That helps the goverment to grow the economy. Some are the following :

  • Business Fixed Investment

Business Fixed Investment means When the Business people of the country start to invest in machines, tools and equipment to increasing the productivity and further production of the products or goods. This kinds of investment increases the value of the company.

  • Residential Investment

Residential Investment means the investment which people spend on constructing or buying new houses or for the purpose of staying or renting out to others. Residental Investments helps the economy to grow from three to five percent of GDP (it also depends on the economy conditions of the country.) The residental invetsment has good value at both of the market Primary and Secondary market.

  • Autonomous Investment

Autonomous Investment is also known as goverment investment. it refers to the investment on houses, roads, public buildings and other parts of public Infrastructure that will be utilised by the public. It does not depends on the income because goverment has to invest on infratuctures, road etc.

  • Financial Investment

Financial Investment means buying new shares, bonds or debentures that will be consider as financial investment. the buying of old bonds, shares or depentures will not be consider financial investment. the financial investment directly impact on the growth of the economy.

  • Planned Investment

Planned Investment means when the investor invest money to calculated every aspects of the investment, that is called planned investment. Most the time, planned investment gives the positive results to the investors and it also helps the investors to make the faith on the company.

  • Induced Investment

Induced Investment means the investment which is depends on the income level of the people, when the income increases then Entrepreneurs starts to investing more. When the income level starts to decreasing then Entrepreneurs starts investing less.

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