Principles of Macroeconomics / Unit 3 MAC 0204 short lesson, about 20 seconds
Investment Means New Capital
Captions available
The idea
In GDP, investment means newly produced capital: business structures and equipment, new housing, and the change in inventories. It is the most volatile component.
In practice
A new factory counts; a thousand dollars of shares does not.
Where people slip
Buying stocks or bonds is financial investment, which transfers ownership without producing anything new.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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