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In a nutshell, the key determinants that affect investment are:

  • The Keynesian Marginal Efficiency of Capital Theory, I=f(r)
  • The Keynesian explanation if there is non ceteris paribus, I=f(all other factors)
  • The Accelerator Theory
  • The role of firms' profits
  • And then a collection of the other factors, being exchange rates et cetera.
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13y ago
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10y ago

One factor that determines the level of investment is the amount of disposable income available. Another factor is the amount of expenditure.

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Q: What are the factors that affect investment?
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