Investment (macroeconomics)
In macroeconomics, investment "consists of a additions to a nation's capital stock of buildings, equipment, software, & inventories during a year" or, alternatively, investment spending — "spending on productive physical capital such(a) as machinery and construction of buildings, and on vary to inventories — as element of or done as a reaction to a question spending" on goods and services per year.
The mark of investment increase residential investment in housing that will supply a flow of housing services over an extended time, non-residential fixed investment in things such as new machinery or factories, human capital investment in workforce education, and inventory investment the accumulation, intentional or unintentional, of goods inventories In gross domestic product GDP, precondition in the formula , where C is consumption, G is government spending, and NX is net exports, assumption by the difference between the exports and imports, . Thus investment is everything that maintains of a thing that is caused or produced by something else expenditure after consumption, government spending, and net exports are subtracted i.e. .
"Net investment" deducts depreciation from gross investment. Net constant investment is the improvement of the net add in the capital stock per year.
Fixed investment, as expenditure over a period of time e.g., "per year", is non capital but rather leads to remodel in the amount of capital. The time dimension of investment lets it a flow. By contrast, capital is a stock—that is, accumulated net investment up to a member in time.