What Is a Net Investment?
Net investment is the new investment of the whole society, that is, the newly invested part of funds. Net investment is the remaining share of the total investment after excluding the capital equipment portion used to compensate. So the sum of net investment and replacement investment is the total investment. Since the net investment is part of the new investment, its amount depends on the changes in income. Western economists believe that the meaning of investment is always the formation of actual capital, such as increasing the production of inventory, the production of new factories, houses and tools. Therefore, the net investment includes: the net increase in various items such as houses, equipment, and inventory. The way to get an accurate figure for the net investment is to subtract the depreciation from the total investment. [1]
Net investment
Right!
- Chinese name
- Net investment
- Foreign name
- (net investment
- Also known as
- Induced investment
- Definition
- Investment expenditures to increase capital stock
- Net investment is the new investment of the whole society, that is, the newly invested part of funds. Net investment is the remaining share of the total investment after excluding the capital equipment portion used to compensate. So the sum of net investment and replacement investment is the total investment. Since the net investment is part of the new investment, its amount depends on the changes in income. Western economists believe that the meaning of investment is always the formation of actual capital, such as increasing the production of inventory, the production of new factories, houses and tools. Therefore, the net investment includes: the net increase in various items such as houses, equipment, and inventory. The way to get an accurate figure for the net investment is to subtract the depreciation from the total investment. [1]
- Net investment, also called induced investment, refers to investment expenditures to increase the capital stock, that is, the net increase in actual capital, including the net increase in construction, equipment, and inventory. The amount of net investment depends on changes in national income levels and interest rates.
- The portion of the total investment excluding the replacement investment is net investment.
- Total investment is the expenditure to increase or replace capital assets (including plant, dwellings, machinery and equipment and inventory), and is the capital flow added to the capital stock within a certain period.