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Explain the term- inventory investment
We would have a negative inventory investment whenever inventories decrease. By net investments we mean gross investments minus depreciation such that actual increase in amount of capital between two periods in time is equal to net investment during this period. Keep in mind that when capital is a stock, investment is a flow. We may talk about a firm's total amount of capital at a certain point in time and a firm's total investment over a period of time.
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While referring to the "EYE on YOUR LIFE" section on page 235 of the textbook, and the economic concepts you have accumulated during our course, consider the trade policies that se
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