-The amount of real investment is CRITICAL to growth in our economy. -When referring to investment, be sure to understand what type of investment you are working with: -Financial Investment -Real Investment |
By creating savings or financial investment plans, people are able to better prepare for their futures.
People can choose to either spend or save their money. SAVING: This is a form of investment because those with savings accounts receive returns. The rate of return depends on the strategy of saving: whether it be bank accounts, stocks, bonds, or mutual funds. -Investing refers to postponing current consumption or towards to pursue an activity with expectations of greater benefits in the future. -Financial investment includes the decisions by individuals and firms to invest money in financial asset. Examples of financial assets include bank accounts, certificates of deposit, stocks, bonds, and mutual funds. -Financial investment is extremely important to accumulating personal wealth. -Real investment or physical capital investment is a component of aggregate demand. -It refers to the decisions by firms to purchase equipment and a physical plant. -It also refers to the purchases of new homes by consumers. |