1. The purchase of capital goods, such as plants and machinery in a factory in order to produce goods for future consumption. This is known as a capital investment; the higher the level of capital investment in an economy, the faster it will grow.
2. The purchase of assets, such as securities, works of art. bank and building-society deposits, etc.. with a primary view to their financial return, either as income or capital gain. This form of financial investment represents a means of saving. The level of financial investment in an economy. will be related to such factors as the rate of interest. the extent to which investments are likely to prove profitable, and the general climate of business confidence.
