Highlight the types of investment.

1. Autonomous Investment:
This is investment that does not depend on the level of income. It is determined by exogenous functions e.g. inventories, population growth, wealth changes, research, etc.

2. Induced Investment:
This is investment that depends on income or profit. It is influenced by the factors, which affect income and profit e.g. prices, wages, interest, etc.

3. Gross and Net Investment:
Gross investment is the total increase in capital stock in a year.
Net investment is the net addition to capital stock in an economy after deducting capital consumption allowance from gross investment.

4. Intended and Unintended Investment.
Intended (voluntary/planned) investment refers to deliberate accumulation of capital stock aimed at achieving a specific objective.
Unintended (Involuntary/unplanned) investment is where capital stock accumulated due to unexpected fall in demand.

5. Private Investment
- It is investment made by private investors in an economy. It is normally made in response to profit expectations. It depends on the interest rate and the marginal efficiency of capital. It increases as the interest rate falls. It also increases as the marginal efficiency of capital (MEC) increases.

6. Public Investment
- It is investment made by the government and other public enterprises.

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Dana05 answered the question on July 18, 2019 at 19:50