16 INVESTMENT - SECTION 16 INVESTMENT AUTONOMOUS INVESTMENT...

Info icon This preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
SECTION 16: INVESTMENT
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
AUTONOMOUS INVESTMENT Investment spending that does not depend on the level of GDP. INDUCED INVESTMENT = Investment spending that increases or decreases as GDP increases of decreases TOTAL INVESTMENT SPENDING PLANT AND EQUIPMENT SPENDING Some is autonomous and some is induced Influenced by state of the economy and by level of interest rates NEW RESIDENTIAL CONSTRUCTION Some is autonomous and some is induced Influenced by level of interest rates
Image of page 4
CHANGE IN INVENTORIES The desired change in inventories does not necessarily equal the actual change in inventories. Cannot be completely determined by business firms Consumers may buy more or less than the firm expected. DESIRED INVESTMENT SPENDING = Desired plant and equipment spending + Desired new residential construction spending + Desired change in inventories ACTUAL INVESTMENT SPENDING Desired investment does not necessarily equal actual investment spending.
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern