Chapter 9 Theory of Investment 友学经济学院
Chapter 9 Theory of Investment 0 10 20 30 40 90 91 92 93 94 95 96 97 98 99 00
Topics to be Discussed o 9.1 Decision of investment o 9.2 Investment function o 9. 3 Inventory investment Investment in residential structures 友学经济学院
Topics to be Discussed 9.1 Decision of investment 9.2 Investment function 9.3 Inventory investment & Investment in residential structures
9.1 Decision of Investment o Concept of investment Flow of payout that will increase the stock of capital o Categories of investment . fixed business investment .s Inventory investment Investment in residential structures 友学经济学院
9.1 Decision of Investment Concept of investment ❖ Flow of payout that will increase the stock of capital Categories of investment： ❖ Fixed business investment ❖ Inventory investment ❖ Investment in residential structures
9.1 Decision of Investment o Micro basic( use fix business investment as an example Two procedures of investment decision Decide desired capital stock Get desired capital stock by investment 友学经济学院
9.1 Decision of Investment Micro basic（ use Fix business investment as an example） ❖ Two procedures of investment decision Decide desired capital stock； Get desired capital stock by investment
9.1 Decision of Investment o Desired capital stock . o Fixed capital stock that can achieve maximal profit when added to other production elements o Principle to decide desired capital stock .o Principle to decide desired capital stock(ignore tax) Marginal income of capital=price of the capital 友学经济学院
9.1 Decision of Investment Desired capital stock ❖ Fixed capital stock that can achieve maximal profit when added to other production elements Principle to decide desired capital stock： ❖ Principle to decide desired capital stock (ignore tax）： Marginal income of capital=price of the capital