2.2.3

Question 1

Gross investment

Answer 1

The amount that a firm invests in business assets that does not account for depreciations

Question 2

Depreciation

Answer 2

When something starts to lose value, such as a car loses value the older it gets

Question 3

Net investment

Answer 3

The actual addition to the capital stock of an economy, after depreciations have been considered

Net investment = gross investment- depreciation

Question 4

Influences on investment

Answer 4

• the rate of economic growth
• business expectations and confidence (animal spirits)
• demand for exports
• interest rates
• access to credit
• the influence of government and regulations