Explain fixed investment and inventory investment. Explain their significance also.
Answers
Answer:
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Explanation:
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Answer:
Fixed investment refers to the acquisition of newly created fixed capital. Inventory investment is the goods produced and goods sold in a year.
Explanation:
Fixed investment is the measurement done as a flow variable, or as a sum per unit of time. Fixed investment is thus the accumulating of tangible assets like equipment, real estate, buildings, installations, cars, or technology.
Investment in inventory is a part of the gross domestic product. Naturally, what is created in one nation is also sold there at some point, but some of the products produced in a given year might be sold in a year other than the one in which they were produced.
The type of commodities on which investment is to be made is the primary distinction between fixed investment and inventory investment.
Fixed investment, means spending on investments in capital goods. Contrarily, inventory investment refers to the cost associated with stock investment.
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