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Investment

Investment, also called gross private domestic fixed investment is the sum of two really different components: non-residential investment and residential investment.

investment Investment

Nonresidential investments are purchases of capital goods made by businesses. These purchases can be divided into two groups: structures (e.g. new plants, factories and such) and equipment and software (e. g. tools, machines, necessary computer programs).

Residential investments are purchases of houses and apartments made by people.

The reason why these purchases are thought of as investments rather than anything else is that the goods in question are intended to provide services in the future. Machines, tools, factories are used to create output and new value in the future and people buy houses to provide them with housing services in the future.

In 2010. these investments accounted for 16.3% of Total US GDP.

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