Define Investment. What are the elements of determining the Investment?
Answers
Investment of hard earned money is a crucial activity of every human being. Investment is the commitment of funds which have been saved from current consumption with the hope that some benefits will be received in future. Thus, it is a reward for waiting for money. Savings of the people are invested in assets depending on their risk and return demands.
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⭐Economics⭐
What are your reasons for studying Economics ❔
Economics:
=> Helps us to solve economic problems
=> Helps us to make intelligent/wise choices in the backdrop of scarcity
=> Helps a producer to maximise his/her profit, and a consumer to maximise his/her satisfaction...
Thus, it is for these reasons that I am studying Economics...
Economics is defined as "The study of how people choose to employ scarce resources which could have alternative uses in order to produce various commodities which satisfy their wants, and to distribute them amongst various persons and groups in the society..."
=> Economy is defined as a system which provides livelihood to common people...
=> Non-Economic Activities are defined as those activities which are not concerned with money and monetary deals. The objective of all non-economic activities is self satisfaction, the satisfaction of loved ones, or public welfare...
=> Economic Activities are defined as those activities which are performed mainly to earn, spend, invest, or distribute money...
The Vital Processes of an Economy are defined as those economic activities which are performed to fulfil the objective of livelihood...:
- Production is defined as the continuous process which transforms raw materials or inputs into finished goods or outputs, thus, creating utility...
- Consumption is defined as the usage of goods and services for the satisfaction of human wants, or the fulfillment of human needs...
- Distribution is defined as the division of the national income into wages, rents, profits, and interests, amongst the factors of production...
- Investment or Capital Formation is defined as the money which is spent to buy assets such as land, buildings, vehicles, livestock, etc., or any other equipment, with the hope that these assets will earn profits in the future. Basically it refers to an increase in the stock of capital...
=> Observation is a unit of data...
=> Policy is defined as a measure to solve an economic problem...
=> Analysis is defined as understanding and explaining and economic problem in terms of the various causes behind it...
=> Scarcity is defined as the lack of availability...
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