Generally, investment can be dividend in to the following types:
1. gross and net investment
in any economy, the aggregate real investment is known as gross investment. such investment reflect es the amount spent on gross assets. all real investment in any sectors will not be used to increase the production capacity. some part of it will be used in the construction of basic infrastructure for production, for repairing and maintenance of old and broken machinery's and for keeping up-to-data the depreciation of fixed capital so, some part of grose investment will also be in the form of substitution demand. this will be used in repairing, maintenance and substituting old and broken machinery's. all these expenditures are known as Gross investment. GI = NI + Depreciation. net investment is that part of the investment which is used in increasing the gross production capacity which is exist in the economy. gross investment and net investment will be equal to each other when in the economy there won't be any problem of repairing and replacing old and broken machinery's as well as there will be no need of depreciation. but in real world such situation will not occur. for this reason net investment will be less then gross investment. if depreciation is deducted from the Gross investment, then net investment will be obtained.
2. private and public investment
investment by an individual or private institution in various industries and business withe the motive of earning profit is known as private investment. this type of private investment depends upon the marginal efficiency of capital is more then the rate of interest then the investment will increase. otherwise investment will decrease. on the other hand investment by government sectors or various bodies of government is known as public investment. in such investment public benefit is stressed more then the profit. investment in construction of roads, brides, canals, hospitals, educational institutions, transportation communication sectors, etc. is known as public investment. such investment will have indirect benefits rather than direct benefits.
3. induced and autonomous investment
investment determined by the change in direct production and income is known as induced investment. thus, this is known as the function of income. that is: so, induced investment is directly proportional to the income. in other words, induced investment increase as the income increase. the increase in the disposable income of the propel in the society increase the effective demand. so, quantity of induced investment depends upon the quantity of income.
1. gross and net investment
in any economy, the aggregate real investment is known as gross investment. such investment reflect es the amount spent on gross assets. all real investment in any sectors will not be used to increase the production capacity. some part of it will be used in the construction of basic infrastructure for production, for repairing and maintenance of old and broken machinery's and for keeping up-to-data the depreciation of fixed capital so, some part of grose investment will also be in the form of substitution demand. this will be used in repairing, maintenance and substituting old and broken machinery's. all these expenditures are known as Gross investment. GI = NI + Depreciation. net investment is that part of the investment which is used in increasing the gross production capacity which is exist in the economy. gross investment and net investment will be equal to each other when in the economy there won't be any problem of repairing and replacing old and broken machinery's as well as there will be no need of depreciation. but in real world such situation will not occur. for this reason net investment will be less then gross investment. if depreciation is deducted from the Gross investment, then net investment will be obtained.
2. private and public investment
investment by an individual or private institution in various industries and business withe the motive of earning profit is known as private investment. this type of private investment depends upon the marginal efficiency of capital is more then the rate of interest then the investment will increase. otherwise investment will decrease. on the other hand investment by government sectors or various bodies of government is known as public investment. in such investment public benefit is stressed more then the profit. investment in construction of roads, brides, canals, hospitals, educational institutions, transportation communication sectors, etc. is known as public investment. such investment will have indirect benefits rather than direct benefits.
3. induced and autonomous investment
investment determined by the change in direct production and income is known as induced investment. thus, this is known as the function of income. that is: so, induced investment is directly proportional to the income. in other words, induced investment increase as the income increase. the increase in the disposable income of the propel in the society increase the effective demand. so, quantity of induced investment depends upon the quantity of income.
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