wealth,income,future expectation inflation, confidence, unemployment levels and job security
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what is the definition of investment?
its expenditure that increases the capital stock of a country
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what are the factors that affect invetsmment?
interest rate, demand, profitability, gov policies and efficiency of financial services
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what does the goverment spend?
current spending or capital spending
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what is current spending?
its on transfer payments such as beneifts
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what is capital spending?
its a long term spending that increases the productive capacity of the economy
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what are the factors that affect gov spending?
cost of burrowing, fiscal deficit, national debt, state of the econony, political bias and confidence in economy
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what are the factors that affect export/import
exchange rate, quality of good affects international competitiveness, levels of income and how much spare capacity
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what is the definiton of saving?
it is part of the disposable income not spent
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what are the determinents of saving?
interest rate, consumer confidence, job security, inflation expectation and income levels
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what is the accelerator effect?
The accelerator process links the growth in real income to a change in the rate of investment. The accelerator process helps to explain why investment is so volatile.
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Other cards in this set
Card 2
Front
what is the definition of investment?
Back
its expenditure that increases the capital stock of a country
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