I have discussed the concept of Investment as given in National Income chapter of economics class 12 CBSE Board.
What we read here is what is considered as investment in economics. Its definition and would understand its concepts with few examples.
Addition made to the stock of capital during a period is called investment.Book, S.K Aggarwal
Note:- It is also called Capital Formation
Difference between Capital and Investment
Capital vs Investment
|The Capital Goods added to this capital during the year, is called investment||The accumuated stock of Capital goods at the begining of the year is called capital|
Note:- Capital & Investment consist of Capital Goods
Types of Investment
Fixed and Stock Investment
Investment in fixed capital called fixed investment i.e. machinery, furniture etc.
Investments in stock of raw materials, semi-finished goods and finished goods Stock investment. i.e. goods to be sold.
Examples of Investment
Investment is assumed to be made only by the producer, not by the consumer at all.
Examples of fixed investment are machinery, furniture, building etc.
Examples of Stock investment are raw material, semi-finished goods and finished goods.