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Investing in your business by investing


If you are just getting started in investments then you might be unaware of what investments are and even if you do think you know what investments are you still might be shocked to learn exactly what they are. Many people think that investments are money that is being invested that people are expecting to get a return on at some point in the future. And while they are right in a sense they are not covering all of what investments are, what those people are talking about is financial investments. But investments are used in both finance and economics and the term means similar things in both categories. Basically investments are the accumulation of some kind of asset in hopes of getting a future return on it. And one of the best ways to invest in your business is through economic investing.


In economics investments are actually the production per unit time of goods which are not consumed but are to be used for future production. In economics investments can be both tangible and intangible assets and can include factories that companies are building or they can include the training that the company provides its new employees or training it provides its continuing employees. The reason that these are considered investments is that they are not being used by the company currently, but they are being used in the future to help make or sell the products. Basically what is happening is that companies are investing in the time and materials they are going to need in the future, which include production facilities or trucks to ship the goods and the employees that are needed to produce the products.

Now that you understand how investments work in economics they are a few more things that you need to understand before we get to the six roles that investments plays in economics. One thing that you need to know is that the more money you invest in tangible and intangible assets the higher your return is going to be in the future. What this means is that the more hours you spend training your employees on what they are supposed to be doing and how they are supposed to be doing the better the employee will be able to do their job and do it correctly. But another thing that you need to know is that as interest rates raise the chances of companies borrowing money to add to their investments is going to be less because of the fact it is going to cost more to borrow the money and in the long run that means less of a return on the money. What is the smartest thing to do is to invest the companies own money if at all possible, this way you are not having to pay back the finance charges or the high interest rates to other people.

Here is a look at the six macroeconomic roles that investments play.
- Investments contributes to the current demand of capital goods, which actually increases domestic expenditure
- Investments also enlarge the production base, which in turn leads us to increased production capacity
- Investments also helps to modernize the production process, which in general improves a companies cost effectiveness, which basically means they can make more items for a cheaper price
- Investments also allows for the production of new and improved products, which in turn increases the value added in production
- Investments can also help lower the amount of labor needed per unit of output, which in turn can lead to lower employment levels, but it also has the potential for higher productivity
- And the last role that investments play is that they incorporate international world-class innovations and quality standards which helps to bridge the gap with more advanced countries and countries that rely on exports


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