Investment refers to spending by firms on capital goods such as machinery, equipment, buildings, or research and development aimed at increasing production capacity or improving technology.
Related terms
Physical Capital: The stock of tools, equipment, buildings, and other durable inputs used in production.
Financial Investment: Purchasing financial assets such as stocks, bonds, or mutual funds with the expectation of earning a return.
Public Investment: Government spending on infrastructure projects like roads, bridges, or schools that aim to benefit society and promote economic growth.