Tuesday, May 15, 2012

Determinants of Private Domestic Investment

Determinants of Private Domestic Investment

Determinants of Private Domestic Investment

Economics Revision Article Series

Authors

The major motivation behind investment is to earn a net profit.
 
Therefore revenues expected to be produced by the investment, the cost of investment influence investment decision. The expectations about the future general economic conditions affect the expectation about the revenues expected from an investment.
 
Higher interest rate leads firms to decrease their investments as cost of investment rises with rise in interest rates.

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