Investment and Economic Activity
14.1 The Role and Nature of Investment
- Investment adds to the nation's capital stock.
- Gross private domestic investment includes the construction of nonresidential structures, the production of equipment and software, private residential construction, and changes in inventories.
- The bulk of gross private domestic investment goes to the replacement of depreciated capital.
- Investment is the most volatile component of GDP.
- Investment represents a choice to postpone consumption – it requires saving.