Investment And The Factors To Consider Before Investing (Essay Sample)

RENSON OMUMU
FACTORS THAT DETERMINE INVESTMENT
Introduction
Investment is very essential to any country as it helps the society grow thus improving the standards of living. This paper will primarily focus on the key factors that determine the level of investment in a modern society.
Government policies and regulation is very important in determining the level of investment. This is so because if the regulation put down by a government is considered too exorbitant by investors, then it will be very difficult for any investment to take place. This means that government ought to figure out and implement regulations that are fair to both parties.
Another important factor is the overall economic condition. A society having an increase in its economic growth will definitely have more investors. Economic growth will mean more and better opportunities and this will definitely increase investment (Mukherjee 2012).
Consumer demand is another vital aspect as it greatly induces the level of investment in the economy. This means that if the current demand for consumer goods increases, then it means that more investments will be made. In short if consumer demand is low then investments opportunities will also be low.
Inventions and innovations are very important to any economy. This is so because they tend to raise the inducement to invest. If for example, a certain invention and technological improvements lead to competent methods of production that reduce cost, the MEC of new capital assets will rise, which in turn will encourage firms to make larger investments (Mukherjee 2012).
Last but not least is the growth of the population. A grow...