Overview
Investment plays a vital role in shaping the economy by allocating resources to generate future profits. It influences long-run supply by increasing production capacity, which can lead to economic growth and market stability. Understanding the relationship between investment and long-run supply help...
Key Terms
Example: Buying stocks is a form of investment.
Example: Long-run supply adjusts to changes in production capacity.
Example: The upward slope of the supply curve indicates higher prices lead to more supply.
Example: At market equilibrium, there is no surplus or shortage.
Example: Investment in technology can drive economic growth.
Example: A factory's production capacity can be increased with new machinery.