Let's do some Economics this Morning, Investment has been a very interesting topic because everyone is advised to invest and invest and invest as that's the foundation for a better tomorrow. In economics the investment function is I = F(r) Where I is investment and
r is interest rate i.e investment is a function of interest rate, this simply means investment is dependent on the current rate of interest, if interest rate is high it discourages borrowing to invest and encourages savings because the marginal efficiency of capital
which is the rate of return on investment might be lower than the interest on the borrowed capital which makes it irrational to invest and vice versa. However in reality investment is determined by alot of other factors which are Arbitrage Opportunities, Political environment and
Economic Policy of the State, inventions, innovations or a necessity for a new product, consumer demands and availability of Capital also, this is just to mention a few, the list can go on and on but in all of this factors consideration and lots of theories you might read about
investment the primary goal as an entrepreneur is to minimize cost and maximize profit.
To be continued next week, Do have a Great week From the Desk of the CEO JERSHANBIZ VENTURES. 🤝🏽
To be continued next week, Do have a Great week From the Desk of the CEO JERSHANBIZ VENTURES. 🤝🏽
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