Significance of Fixed Investment ?
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Explanation:Fixed investment also measures the amount of increase in the total stock of capital each year. Higher fixed investment implies a higher total stock of capital and output. iv. It plays a vital role in the cyclical movements in incomes as it initiates and supports the whole process of income creation
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Answer:
Fixed investment also measures the amount of increase in the total stock of capital each year. Higher fixed investment implies a higher total stock of capital and output. iv. It plays a vital role in the cyclical movements in incomes as it initiates and supports the whole process of income creation.
- It implies the increase of stock of fixed capital of production
- It raises production capicity of firms and leads higher output
- Higher output leads higher economic rate of growth
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