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June 6, 2026 

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ACTUAL INVESTMENT: Investment expenditures that the business sector actual undertakes during a given time period, including both planned investment and any unplanned inventory changes. This is a critical component of Keynesian economics and the analysis of macroeconomic equilibrium, which occurs when actual investment is equal to planned investment. The difference between planned and actual investment is unplanned investment, which is inventory changes caused by a difference between aggregate expenditures and aggregate output. Should actual and planned investment differ, then aggregate expenditures are not equal to aggregate output, and the macroeconomy is not in equilibrium.

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NEEDS:

The physiological or biological requirements for maintaining life, such as air, water, food, shelter, and sleep. Physiological needs are often contrasted with psychological wants that make life more enjoyable, but are not essential for existence.
Satisfaction is achieved by fulfilling needs. The pursuit of satisfaction, the fulfillment of needs (as well as wants), motivates human behavior, including all types of economic behavior--buying, selling, producing, and consuming.

Consider a few examples.

  • Duncan Thurly, a normal human being, is hungry. This hunger need motivates him to purchase a Deluxe Club Sandwich from Manny Mustard's House of Sandwich. This results in the production of a Deluxe Club Sandwich by Manny Mustard, which also entails the purchase of meat, bread, condiments, and other assorted inputs. Once he consumes this sandwich, Duncan is still hungry, so he purchases a Hot Mamma Fudge Bananarama Ice Cream Sundae. This results in the production of the hot fudge sundae and also entails the purchase of ice cream, hot fudge topping, bananas, and other inputs. A great deal of economic activity is triggered by Duncan Thurly's hunger.

  • Duncan Thurly is also sleepy. The neighbor's dog has been barking incessantly for fourteen straight nights. The need for sleep motivates Duncan to purchase a new bed. He also buys a new radio that plays only soothing music. He then purchases a set of ear plugs. Because none of this works, he pays a company to remodel his bedroom, adding eight inches of sound-proofing insulation. He subsequently hires a real estate agent to sell his house. A great deal of economic activity is triggered by Duncan Thurly's need for sleep.

  • Duncan Thurly is further in need of shelter. Having sold his house, Duncan has no protection from the weather. The temperature has dropped to five below zero. Duncan is concerned about frostbite, hypothermia, and freezing to death. He breaks into the MegaMart Discount Super Center, finds the bed display and curls up for the night, warm and protected. This sets off burglar alarms and sends the police to investigate. Duncan is subsequently prosecuted and spends the next five years in prison. A great deal of economic activity is triggered by Duncan Thurly's need for shelter.

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Recommended Citation:

NEEDS, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2026. [Accessed: June 6, 2026].


Check Out These Related Terms...

     | wants | unlimited wants and needs | consumer sovereignty |


Or For A Little Background...

     | scarcity | satisfaction | incentive | free lunch | resource allocation | value |


And For Further Study...

     | three questions of allocation | second rule of subjectivity | consumer sovereignty | good | service | needs standard | production possibilities | utility analysis | consumer demand theory | elasticity |


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