"One of the key ingredients in economic growth is investment"
2006-12-06 10:52:33 · 5 answers · asked by badgirl2thefullest 1 in Social Science ➔ Economics
in·vest –verb (used with object) 1. to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.
The economy and wealth of a nation increases the more people invest and use thier money to profit. (investment goes up = improves the economy)
2006-12-06 11:07:19 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The REASON investment stimulates economic growth is that invested funds are the capital that businesses tap into in order to expand their business. Companies expanding their businesses hire people, buy capital equipment, and increase sales. These are all constituents of "economic growth", and they are possible because a company can gain access to capital.
Specifically how investment and capital are related is that there are 3 basic channels a company can turn to in order to acquire capital for growth:
- selling bonds: in which case the bond that a company sells is some investor's investment.
- selling stock: in which case an investor hands over money in exchange for part ownership of a company
- Borrowing from a bank: the bank's lending funds come from bank savers making deposits.
2006-12-06 11:44:37 · answer #2 · answered by KevinStud99 6 · 0⤊ 0⤋
Investment stimulates economic growth.
2006-12-06 10:55:02 · answer #3 · answered by Clown Knows 7 · 1⤊ 0⤋
It means that for the economy to grow, you have to give up things, to earn things.
2006-12-06 13:03:27 · answer #4 · answered by Sarah M 2 · 0⤊ 0⤋
ditto.
2006-12-06 10:58:28 · answer #5 · answered by jemm4president 3 · 0⤊ 0⤋