Overview

Business investment is concerned with the provision of funds for investment in business enterprise, an investor must offer whatever is invested in this way, and this means that the investor must sacrifice consumption and save to offer the funds. Savers and the users of their funds come jointly in the market for investment, where the normal rules of supply and demand apply unless there is government interfering with interest rates. The cost of money is the rate of interest rewarded for the use. If the demand for investment funds is greater than the funds offered for investment by savers, then the rate of interest will increase until people in the market are induced to sacrifice consumption and make their reserves available for investment.

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9782294412110

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