1、 https:/crsreports.congress.gov Updated March 16, 2021Introduction to U.S. Economy: Business InvestmentWhat Is Business Investment? Business investment is spending by private businesses and nonprofits on physical capitallong-lasting assets used to produce goods and services. Physical capital is gene
2、rally grouped into three categories: equipment (e.g., machinery or computers), structures (e.g., offices or warehouses), and intellectual property (e.g., software development or research and development). Through investment, businesses can build up their stock of physical capital, which increases th
3、eir capacity to produce goods and services. For example, when a restaurant purchases an additional grill, it increases its capacity to prepare food over any given time period. However, physical capital tends to become less productive over time due to wear and tear and must eventually be replaced as
4、it breaks down, a process known as depreciation. For a firm to continually increase its stock of physical capital, and therefore its productive capacity, it must invest in new physical capital faster than its current physical capital is depreciating. The same is true for the economy as a whole: For
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