Gross investment and its importance in the implementation of foreign economic activity

The development of a modern economy would be impossible without the presence of two main levers of economic management - stable lending and long-term investments. The latter have a huge impact on the development of various economic sectors of any country, therefore, in order to better understand the mechanism of their functioning, investments and their main types should be carefully studied. After all, in addition to additional financial injections into the development of existing industries, they can give impetus to the emergence of entirely new areas in scientific and technical activities.

So, gross investments represent the entire amount of capital expenditure, which includes not only depreciation charges, but also additional investments in production, which appear at the expense of profit. In addition, there are also net investments that do not take into account depreciation charges. Everyone knows that before investing in a certain industry, investors preliminarily study the economic situation, weighing all the advantages, and also considering possible risks. Thus, preliminary gross and net investments are carefully calculated and studied by professional investors, as a result of which they can predict their income from investment. The whole process of such research results in a report on which one can draw a conclusion about the level of the investment climate in the country. It can be either positive, which indicates a successful level of development of the state, or negative if the country has an unstable economic or political situation. In the latter case, the investor refuses to finance a particular project.

In addition, it should also be noted that gross investment is a long-term investment in the enterprise's economy in order to extract profit for the investor and develop the enterprise for its owner. It should also take into account the level of investment, which depends on the development of production techniques, stability in the political sphere and the economy, the magnitude of state taxes and expenditures, various legislative measures and so on. From the consistency of the above factors, the stability of the level of investments depends on which, in general, one can judge about the real economic situation.

Gross investment contributes to the welfare of citizens, because as a result of this funding new jobs appear, timely payment of competitive wages, quality of service to the population, and so on. It is noteworthy that in order to achieve a high level of investment, it is necessary to create a stable demand for certain goods or services, but at the same time, under the economic crisis, the same demand falls sharply. In the economy, this dependence of investment on demand was called the "paradox of thrift." As a result, gross private investment will have a beneficial effect on the economy of the country only if it can create a certain momentum for demand. After this, there can be no doubt that with a competent allocation of investment funds, all the prerequisites will be created for a stable growth of production and increasing employment of the population.

In conclusion, it should be emphasized once again that the leadership of each country should closely monitor the level of the investment climate, as well as in all possible ways to attract and interest large investors. Gross investments always benefit the state, however, the main thing in this process is the correct distribution of them in key areas of activity.