CONTENTS: 
  1. Meaning 
  2. Classifications
  3. Propensity
  4. Determinants of Induced Investment
  5. Investment Function 
  6. Measures to stimulate Private Investment
  7. Sources of Public Investment
  8. Importance of Investment
   1. MEANING OF                            
         INVESTMENT
         The term Investment means purchasing of different kinds of 
     shares and stocks and investing capital in such activities as are 
     likely to yield income.
    According to keynes: The term Investment ,is used to 
     mean real investment. It means addition made to the existing 
     capital asset which results in an increase in employment. 
         Thus, investment is the expenditure incurred for real capital  
     formation. 
         It includes 3 kinds of items: 
   a) Building of new machines & capital equipments
   b) Construction of new buildings
   c) Increase in stocks.
        DEFINITIONS:
   - In words of KEYNS, “ Investment, thus defined 
   included therefore the increment of capital 
   equipment.”
   - According to Stonier and Hague, “By investment 
   we do not mean the purchase of existing paper 
   securities bonds, debentures or equities but the 
   purchase of new factories, machines and the like.”
 2. CLASSIFICATION OF 
 INVESTMENT
    •2.1 Induced and Autonomous investment
   1)Induced investment: It is governed by 
     income & amount of profit. Induced by 
     changes in income and profit. Induced 
     investment is found in private sector. 
        In words of prof. keiser,” When an increase 
     in investment is due to increase in current 
     level of income & production, it known as 
     investment.”
    
 Induced investment is expressed in fig.1, income is shown on OX- axis & 
 investment is shown on OY-axis. II curve represent induced investment. 
 It slopes upward signifying that investment increases when there is 
 increase in income.
             Y
                 Induced         I
           I     investment
           N
           V
           E
           S
           T
           M
           E
           N
           T
             O                          X
                I     INCOME
                       Figure 1