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INCREASING RETURNS TO SCALE: A given proportionate increase in all resources in the long run results in a proportionately greater increase in production. Increasing returns to scale exists if a firm increases ALL resources -- labor, capital, and other inputs -- by 10%, and output increases by more than 10%. You might want to compare decreasing returns to scale and constant returns to scale.
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                           FIXED INVESTMENT: Capital investment expenditures for factories, machinery, tools, and buildings. This is one of two main categories of gross private domestic investment included in the National Income and Product Accounts maintained by the Bureau of Economic Analysis. The other category is change in private inventories. This category is generally about 95 to 97 percent of gross private domestic investment and includes the capital goods that best reflect what most people consider capital investment. Fixed investment is expenditures made by the business sector',500,400)">business sector for the factories and equipment used as productive resources. Business expenditures for fixed investment are not only critical for expanding the economy's long-run production capabilities, they also play a key role in short-run business cycles. Expansions see more fixed investment and contractions see less.Fixed investment is divided into two major categories: nonresidential and residential. Each of these subcategories is then further divided into structures and producers' durable equipment. - The nonresidential category is just under 70 percent of gross private domestic investment and just over 70 percent of fixed investment. This subcategory includes structures (buildings, pipelines, oil wells) and producers' durable equipment (computers, machinery, vehicles). Structures are about one-fourth of nonresidential fixed investment and producers' durable equipment is about three-fourths.
- The residential category primarily includes houses and apartments, and comes in at just under 30 percent of both fixed investment and gross private domestic investment. Like nonresidential fixed investment, residential fixed investment is divided into structures and producers' durable equipment. Structures are separated into single family (houses) and multifamily (apartments).
Of some importance, single family structures can be owned by either a business or an individual. In other words, the production of an owner-occupied house is included as gross private domestic investment in the National Income and Product Accounts. This is the only notable purchase made by the household sector that is not included in personal consumption expenditures. Structures are about 98 percent of this residential category and producers' durable equipment is the remaining 2 percent.
Recommended Citation:FIXED INVESTMENT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: December 19, 2018].
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Today, you are likely to spend a great deal of time strolling through a department store looking to buy either income tax software or a how-to book on the art of negotiation. Be on the lookout for attractive cable television service repair people.
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The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
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DCE
Domestic Credit Expansion
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