3 ms·
Investment doesn't increase the size of the economy if it doesn't result in increased spending. Spending money on a product or service is the only way to grow t
by dumbfoundded 7y ago
Investment doesn't increase the size of the economy if it doesn't result in increased spending. Spending money on a product or service is the only way to grow the economy.
Investment often results in money effectively leaving the economy as its multiplier rates are much lower than giving the money to consumers who spend it quickly, usually to small businesses that spend the money quickly.
- dodobirdlord 7y ago> Investment doesn't increase the size of the economy if it doesn't result in increased spending. Spending money on a product or service is the only way to grow the economy. Outside of niche scenarios, investment opportunities only exist when there is a desire to spend money on a product or service, but no money is available to spend. > Investment often results in money effectively leaving the economy as its multiplier rates are much lower than giving the money to consumers who spend it quickly, usually to small businesses that spend the money quickly. A lower velocity of money is not the same thing as a reduction in the money supply.