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Investment is defined as the expenditure on producer or capital goods that are used to produce final goods and services. There are many factors which affect investment. investment leads to output increasing in the economy. This is because more goods and services can be produced at a lower production cost, this will also lead to a higher amount profit.

Profitability is a factor that affects investment. Many firms use a portion of their profit for expansion, that is to build a new mine, store or workshop for example. When the economy is strong, there will be rising sales which increases the amount of profit for firms. This will allow the firm to invest and expand/grow their business. However, when the economy is in a weak state, firms may need to run down capital equipment and reduce production costs to reduce the impact on the firms profitability.

Risk is another factor that affects investment. Investment decisions concern the future. There is a risk in investment as the future is unknown. Investment will rise and fall depending on the level of risk that the investment includes for the future. There are many different factors that will assist firms in determining the level of risk in investing. Some of these factors are: political decisions, technology and international events. Before investing, firms will always weigh up the potential risk and return of a future investment.

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Investment is the expenditure on producer or capital goods that are used to produce the final goods and services. This leads to an increase in output in the future. By increasing production, producers can increase profit with lower production costs. Investment is essential to ensure that an economy is growing and healthy. At the same time, investment is The most volatile element of aggregate expenditure. However, it is also the key factor of aggregate expenditure.

Risk is a factor affecting investment. Investment decisions concern the future. As the future is completely unknown, investment will rise and fall based on how risky a firm believes the investment will be in the future. There are many factors that affect the level of risk. These include political decisions, international events, technology and changes in consumer's trends and preferences. Firms always weigh the potential risk and return of a future investment.

Another factor affecting investment is interest rates. Interest rates are the money charged to producers for borrowing money to invest. There is a negative relationship between interest rates and investment. This means that. If interest rates were to decrease, then investment would increase. When the interest rates are low, then there is more of an incentive to invest because the amount of money needed to be repaid will be low. This also means that if a producer were to save, there would not be a high return. This leads to producers investing as there are many incentives due to the interest rates.

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Investment in the expenditure on producer or capital goods that are used to produce final goods and services for the future. There are multiple factors that affect investment, which includes interest rates and government policies.

Interest rates are the rates of interest that borrowers charge firms. The rate of interest borrowers charge a firm is a major determinante that influences investment decisions. The rate of interest affects the ways of investment in the economy. For example if the interest rate is high then the investment will increase as firms have a greater incentive to loan money to borrowers. However if the interest rate is low then there is a less incentive for firms to lend money as they will not recive a larger amount of interest and their profitablity decreases.

Government policies also affect the investment of firms as the affect business costs as well as influence the general level of economic activity. Economic activity relies on the government polices to positively influence the economy. For example if the government lowers taxes there is a greater incentive to invest more as less tax is payed on that investment. Subsidies can also affect the investment of firms as firms are always looking for the best opportunity to make the optimal profitability.

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Investment is defined as the expenditure on producer or capital goods used to produce final goods and services in the future. The future health of the economy is heavily dependent on the level of investment. Investing is crucial to the performance of the Australian economy. As investment increases, the rate of economic activity also increases.

A factor affecting investment is risk. When the economy is in a strong state, businesses are more willing to invest as there is less risk on the potential return of a future investment. On the other hand, if the economy is weak, there is a higher risk to invest and businesses are more likely to retain their profit. According to the RBA, in the past three years the rate of business investment has fallen from 19% of GDP in 2013 to just under 14% currently. With a decrease in economic stability, businesses are less willing to invest as it imposes higher risks.

Another important factor affecting investment is interest rates. Interest rates represent the price of borrowed funds. This means that higher interest rates equal higher interest repayments on the money borrowed, meaning higher interest rates reduce investment. An inverse relationship exists between interest rates and investment. Higher interest rates also impose higher risks, meaning firms will be less willingly to invest. The cost and risk of borrowing outweighs the potential return

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Investment is expenditure on producer or capital goods that are used to produce final goods and services in the future. Investment is the most volatile element of aggregate expenditure. Investment levels are very important determinant of aggregate expenditure demand and future health of the economy.

A factor affecting investment is risk. This is a factor because investment decisions concern the future resulting in risks as investment levels may change. Many factors influence the level of risk such as political decisions, international events, technology and changes in consumers trend and preferences. For example, if firms want to invest but there is a risk of technology breaking, firms may not choose not to invest.

Another factor affecting investment is profitability. Profitability is the profit firms keep in order to expand their business. When the economy is strong there will be rising sales therefore firms will have increased profit so they will have more money to expand their business by using more advanced equipment. When economic conditions are weak profitability decreases therefore firms will choose to use less advanced equipment which decreases efficiency.

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Investment is expenditure by firms, on goods that are used increase the output in the future, by increasing production it then will decrease production costs and increase profits. Rising investment ensures that an economy is healthy and growing, however is the most volatile elements of aggregate expenditure. Investment is influenced by a range of factors including, risk, interest rates, business expectations, profitability and government policies.

A major factor in determining the amount of investment in the economy is determined by the business' expectations. If Firms believe that the current economy is leading to or in a boom, firms will believe that their profitability will be impacted positively.  In the current economy it shows how that business confidence is very low as depicted NAB business survey, with it giving a result of around 0. This result means that around and 50% of businesses are not confident with the current state of the economy. This has impacted investment because firms feel insecure about their current financial position within the economy, leading to them retaining more of their profits.

Interest rates is the amount of money charged to firms by financial institutions for borrowing money to fund investment. The relationship between investments and interest rates is negative, meaning that as the higher the interest rate the lower the amount of investment. Currently the interest rates are the lowest they have been in recent times, this should encourage investment, ceteris paribus. This is because if a business has to take out a loan to fund investment the repayments on the loan will be very low. When interest rates are low, it discourages savings because the return on your savings would be very low. Although interest rates are low investments is still low in the current economy as business expectations are too low for business' to take the risk and invest in new goods, this is because they feel that the risk of the current economy is not worth the reward of taking advantage of the low interest rates.

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Investment is expenditure on producer or capital goods that are used to produce final goods and services in the future. Investment is a good determinant of the health of the economy in the future as people are more likely to invest when the feel confident in the economy. Some factors of investment include risk, interest rates, business expectations, profitability and government policies. These all have a factor on a firms confidence in investing.

A factor that effects investment is Risk. This is because investment is about the future and as the future is not known, an investment results in risk. As a firm would like to have as much money and power as possible (rational self interest), A firm will weigh up the risks of an investment and if the feel that the potential risk is greater than the potential reward, a firm will chose not to invest. An example of this is the federal election. With the election coming up Buisness are unlikely to invest as there is uncertainty about who is the next prime minister.

Another factor of investment is Business expectations. This is what firms think about the current and future state of the economy and how it could impact on them. If demand is low and the Business cycle is low, firms are unlikely to invest as the don't feel they can guarantee profit due to their investment. Therefore factoring into a firms willingness to invest. This is shown in the market as since the end on the mining boom, investing has decreased aswell as firms don't feel confident in the economy. This is shown as when commodity price decrease from over 150 to around 80 and investment from 19% of GDP to under 14% of GDP at the same time.

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Investment is business expenditure on capital equipment that will produce final goods and services in the future. These include items such as machines, factories and tools.  This can also involve expenditure on new property such as buildings. Private investment is a significant element of aggregate expenditure with investment forming around 21% of Australian GDP in 2014-15. It is recognised as a barometer of economic activity. Usually, when aggregate investment is high, the economy is performing well. Investment is also the most volatile component of GDP. National investment has decreased and now makes up only 13.5% of GDP as opposed to about 19% in 2013.

Businesses consider the future consequences of any investment decisions that they make. All investment decisions concern the future and so involve risk as the future is unknown. Investment will rise and fall based on the amount of risk involved in an investment. The level of risk is influenced by many factors such as political decisions such as fiscal (budget) policies such as the newly implemented $1.1b National Innovation and Science agenda which will "help facilitate business investment" (Australian Federal Budget 2016-17). Businesses may find it less risky to invest when the cost of investing is reduced. Currently, business confidence is at 0ppt, which means that there are an even number of businesses that are optimistic and pessimistic about the state of the economy and investment.

Businesses will retain a portion of their profit for expansion. Expansion allows businesses to purchase new and more efficient equipment or to purchase commercial property. When the economy is strong and there are rising sales, firms will see an increase in their profit and will therefore have more money to invest. When economic conditions are weak, profitability for businesses is not as high and therefore firms may rundown their capital equipment. An example of this is the Global Financial crisis in 2008. Economic conditions worldwide were weak. consumer confidence was at 78, meaning that more people were pessimistic about the economy than optimistic and people were less willing to spend on goods and services. Businesses experienced less profit and therefore had less money to fund investments in order to expand.

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Investment is expenditure on producer or capital goods that are used to produce final goods and services in the future. The level of investment is a very important determinant of aggregate demand and the future health of the economy. Right now according to the RBA, business investment is just under 14% of GDP, which is a drop relative to the past 3 years, as it was at 19% in 2013.

One factor affecting investment is risk. A firm will choose to invest based on the riskiness of investing. If there is a high risk because there is a greater chance they might lose profit, they may choose to not invest. If there is a low risk, firms are more likely to invest as there will not be as great of a loss if the investment fails. It is important for firms to weigh up the potential risk and return of a future investment. The factors influencing the level of risk are political desicions, international events, technology and changes in consumer's trends and preferences. The RBA shows that retail sales are at a low of 4% right now, which means it is risky for businesses to invest as they will not be making the highest possible profit.

Another factor is business expections. Business expectations is what firms expect to happen to the economy in the future, and affects whether they should invest or not. Factors that will influence expectations are current demand from consumers, the strength of the local and international economy and consumer confidence. If firms expect the economy to grow in the future, they will invest to increase their profits. However, if firms expect the economy to go down, their investment will not help them create more profits, therefore will not invest. Currently, according to the RBA, business confidence is relatively low at 0. This will not encourage firms to invest.

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Investment is the expenditure on producer or capital goods that are used to produce goods and services in the future. Investment is an important matter of aggregate demand and the future health of the economy.

Risk is a major factor affecting investment. All investment decisions may concern the future. As the future is not yet to be known, it involves risk. Investment will rise and fall depending on how risky firms believe an investment is in the future. There are many factors that will influence the level of risk such as political decisions, international events, technology and changes in consumer's trends and preferences.

Another factor affecting investment is profitability. Many firms love to keep a portion of their profit for expansion, such as upgrading their equipment. When the economy is strong and sales are rising then firms will increase their profit and have more money to invest and grow their business. For example, in 2005 investment in businesses were rising meaning businesses where gaining good profit. Whereas, in 2016 investment businesses have been decreasing, meaning that the economy is falling. When economic conditions are weak this can impact on the profitability of firms and they may decide to run down their capital equipment.

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Investment is a very important for the success of a business. Investment is expenditure on producer or capital goods that are used in the production of final goods and services in future times. In 2014-15 private investment was around 21% of GDP. Aggregate investment is the most volatile component of GDP.

One factor affecting investment is risks. Risks are investment decisions that concern the future. Investments rise and fall based on how risky firms believe an investment is in the future. If a business decides to make an investment, they must weigh the odds on the effects that may result in the future made on their decision. This investment could have a positive impact or a negative impact in the future, as the future is uncertain.

Interest rates is another factor affecting investment. Interest rates is the rate of interest that borrowers charge firms is a major factor that influences investment decisions. Higher interest rates will tend to reduce investment. This happens because interest rates represent the price of borrowed funds. So therefore higher interest rates is equal to higher interest repayments on the money borrowed.

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Investment. is expenditure on producer or capital goods that are used to produce final goods that are used to produce final goods and services in the future. An example of an investment would be Rio Tinto purchasing new developed machinery to enhance production of Copper-Coal. Capital goods are any man made goods such as a car or even a microwave. The level of investment is a very important determinant in aggregate demand and the future health of the economy. Investment is the most volatile element of aggregate expenditure. Investment makes up 15-26% of GDP.

A key factor determining investment is business expectations. What firms think about the current and future state of the economy and how this is likely to impact on their profitability. An example in our economy today is during the mining boom around 2011, average commodity prices were around 170, this has halved by 2015 where the average commodity price is approx 80. With such a descrease, expectations are at a low for the economy to increase. This is shown by the decrease in business investment which has shown a 7.5% decrease in businesses investing from 2011 to 2015.

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Investment is expenditure on producer or capital goods that are used to produce final goods and services in the future. Investment is a very important determinant of aggregate demand and the future health of the economy. There are five factors that affect investment, these being; risk, interest rates, business expectations, profitability and government policies.

Risk is a major factor affecting investment. All decisions regarding investment involve the future. However, the future is unknown therefore risks must be taken. Investment will rise and fall depending on how risky firms believe an investment is. Many factors influence risk levels such as, political decisions, international events, technology and changes in consumers trends and preferences. For example, if firms want to invest in the new Samsung phone there is the risk that consumers won't buy the phone because the new iPhone is coming out soon as well because of their trends and preferences, therefore firms may not invest.

Furthermore, another key factor affecting investment is business expectations. Business expectations are what firms think about the current and future state of the economy and how that's likely to affect their business in some way. Factors that affect business expectations are demand from consumers, the strength of the local and international economy and consumer confidence. An example of business expectations affecting investment is that in 2016 so far business investment has fallen significantly. This fall could be caused by the weakness in the economy due to China's weakness which is affecting the trade of iron ore, one of Australia's largest exports. Therefore, businesses may be reluctant to invest due to the weakness of the economy.

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Investment is important to ensure the success of a business. It is the expenditure on producer or capital goods that are used to produce final goods and services in the future.

Risk is a major factor affecting investment. All investment decisions involve the future and due to people not knowing what will happen in the future risks are taken. Investment rises and falls based on how risky firms believe an investment is in the future. There are many factors which influence the level of risk such as political decisions and with the election coming up people don't know who will be elected and are unsure about there policies, international events such as China being weak at the moment resulting in mining , technology and changes in consumer trends and preferences. Firms always have to weigh up the potential risk and return of an investment.

Profitability is also another factor affecting investment.  Profitability is the profit firms keep in order to expand their business. When the economy is strong there will be rising sales therefore firms will have increased profit so they will have more money to expand their business by using more advanced equipment.  When economic conditions are weak profitability decreases therefore firms will choose to use less advanced equipment which decreases efficiency

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Investment is expenditure on producer or Capital goods that are used to produce final goods and services in the future. An example of an investment would be Rio Tinto purchasing new developed machinery to enhance production of Copper-Coal. Capital goods are any man made goods such as a car or even a microwave.

Businesses consider the future consequences of any investment decisions that they make. All investment decisions concern the future and so involve risk as the future is unknown. Investment will rise and fall based on the amount of risk involved in an investment. The level of risk is influenced by many factors such as political decisions such as fiscal (budget) policies such as the newly implemented $1.1b National Innovation and Science agenda which will "help facilitate business investment" (Australian Federal Budget 2016-17). Businesses may find it less risky to invest when the cost of investing is reduced. Currently, business confidence is at 0ppt, which means that there are an even number of businesses that are optimistic and pessimistic about the state of the economy and investment.

Furthermore, another key factor affecting investment is business expectations. Business expectations are what firms think about the current and future state of the economy and how that's likely to affect their business in some way. Factors that affect business expectations are demand from consumers, the strength of the local and international economy and consumer confidence. An example of business expectations affecting investment is that in 2016 so far business investment has fallen significantly. This fall could be caused by the weakness in the economy due to China's weakness which is affecting the trade of iron ore, one of Australia's largest exports. Therefore, businesses may be reluctant to invest due to the weakness of the economy.

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Investment is crucial to the success of a business. It is the expenditure on producer or capital goods that are used to produce final goods and services in the future. An example of investment would be, Mazda investing in greater technology in order to enhance profits and produce a greater quantity of cars. Investment made up 16-26% of GDP in 2015.

A factor affecting Investment is Risk. The future is unknown and it involves risk. Many factors can influence the level of risk: political decisions, international events, technology and changes in consumers trends and preferences. When investing, firms will always weigh up the potential risk and return of the investment. For example, if consumers preferences change from ford to holden cars, then investing in ford cars would be a risky decision, as demand for holden cars will significantly increase.

Another factor influencing investment is Profitability. Many firms like to keep a portion of their profit for expansion, things such as new equipment or greater sized stores. When the economy is strong and sales are rising then firms will increase their profit, therefore meaning they have more money to retain, invest and grow their business. For example, in 2006, investment in business machinery and equipment were rising, this shows that profits in business were rising and the economy is strong. However in 2016 investment in greater machinery were at a low meaning that the economy was weak and wasnt performing as well, therefore meaning that firms will choose to save their profit instead of retaining some of it to spend on expansion.

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1.) Use a full sentence response.
2.) Use appropriate paragraph structure.
3.) Explain your understanding of two factors.
4.) Use an example explaining how each factor affects consumption.
5.) Refer to current economic events (i.e. data) for each factor.
6.) Avoid just copying out your notes.
7.) Proof-read your work.
8.) Include your name.
9.) Introduce investment - define, explain, examples of different types of consumption.