Investment
Spending on capital goods.
Brand Loyalty
This occurs when consumer development a strong preference to a particular good or brand, demonstrated by their repeated purchases of it despite being given choices of competing alternatives.
Economic Development
A permanent increase in living standards over time.
Product Innovation
The introduction of a good or service that is new or significantly improved with respect to its characteristics and intended uses.
Process Innovation
The implementation of a new or significantly improved production or delivery method.
Factors that affect investment
- Fiscal incentives (tax concessions on investment)
- Interest rates
- Opportunities created by technological change.
- Market forecast/confidence
- Competitors’ strategies
Assets
Items of ownership, both tangible and intangible, that are convertible into cash.
- Marginal Propensity to Consume
- Marginal Propensity to Save
- Spending multiplier (formula, definition)
- The proportion of additional income that is spent.
- The proportion of additional income that is saved
- 1/MPS, measure the effect of a rise in government expenditure or investment on the GDP
What is the relationship between national income, injections and marginal propensity to save?
Increase in national income = marginal propensity to save x injection
