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Describe the meaning of word -Investment
When we use the word investment, we generally mean "gross investment". Essentially, gross investment comprises all finished goods which we have produced though not consumed. The significant parts of gross investment are gross fixed investment and changes in inventories.
Gross fixed investment is total amount of investment in fixed capital. If a firm produces more than it sells in a particular period of time, its inventory would increase. This would be counted as a positive investment.
Using a short-run Phillips Curve, illustrate the change in inflation and unemployment resulting from the increase in profit expectations.
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