Investment
Investment – it is a word which
covers a wide area or has a very deep meaning. It is not only related with
bond or shares or SIP or any things but also related with making some things
new. Shares or bond are only a shift of assets from one person to another.
But this is not a real investment.
Real investment is an investment which is
related with making some things new or increase in our current capital goods
or assets. It totally related with increase in the capital like for example
– making new house or factory or plant etc. New dam or road or
company issue or increase in inventory also include in the investment.
Different types of investment –
Induced investment- this types of investment totally
motivated by the profit or income. But it is also affected by price, salary,
interest rates or demand. When there is a increase in income – there is a
increase in demand then there is a motivated or induced investment.
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| Induced investment |
It has a
positive co-relation with income I = f(y) where I – investment or y – income.
If income increases from y – y1 then we have a investment level of ‘A’ or next
when there is a increase in the income from y1 – y2 then we have a investment
of ‘B’. We have an extra investment like ‘B – C’.
Autonomous investment – this types of investment related
with innovation or population or R&D or social change or from a new low or
any war etc. for example – building, school, dam, canal or hospital etc. in a
long run all our investment become a autonomous investment.
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| Autonomous investment |
Private investment– an investment which is done by a
private person like TATA or Reliance or Birla or any other person. This type of
investment affected by rate of interest or Marginal productivity of Capital.
Public investment – an investment which is done by
the Government like building, school, hospital, roads, telephone or other
public interested investment.
Intended or unintended investment – when there is a planned
investment for any particular site that is an Intended investment. When there
is a change in demand and then we have some increase in inventory then we have
an Unintended investment.
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