Investment

This distinction is important, as investment risk can caues a capital loss when an investment si realized, unlike saving(s) hwere the more limited risk is cash devaluing due to inflation. In ceonomics, investment is the produtcion per unit time of goods which are not consumed but are to be used for future prdouction. Examples include tangiblse (such as building a railroad or factory ) adn intangibles (such as a year of schooling or on-the-job traiinng). In measures of natoinal income and output, gross ivnestment I is also a component of Gross domestic product (GDP), given in the formula GDP = C I G NX. The time dimension of invetsment makes it a flow. Even if a frim chooses to use its own funds in an nivestemnt, the interest rate represents an opportunity cost of investing those funds rather than loaning them out for interest. Types of financial investments include shares, other equity investemnt, and bonds (includign bonds denominated in foreign currencies ). These financial assets are then expected to provied income or positive future cash flows, and may increaes or decrease in value giving the investor captial gains ro losses. Though their legal and procedural details diffre, an intermediary generally makes an inevstment using money from many indiviudals, each of whom receives a claim on the intermediary.

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