This document discusses two types of investment: autonomous investment and induced investment. Autonomous investment refers to public investments like infrastructure that do not change with income levels. Induced investment is private investment that is affected by changes in income, consumption, and aggregate demand - as income rises, more investment is made in capital goods to produce more consumer goods. Both types of investment are illustrated with diagrams showing their relationship to income levels.

1. Presentation
 What is investment ?
 Type of investment

3. Types of investments
1. Autonomous investment
2. Induced investment

4. Autonomous Investment
 Autonomous investment means investment which does not change
with the changes in the income level and is therefore independent of
income.
 This autonomous investment includes expenditure on building, dams,
roads, canals, schools, hospitals, etc.
 Since investment on these projects is generally associated with public
policy, autonomous investment is regarded as public investment.
 This autonomous investment depends more on population growth and
technical progress than on the level of income.

5. Cont…
 Autonomous investment can be represented
diagrammatically as in the figure given below.
 This means that whatever the level of income
investment remains the same.

6. Induced investment
 Induced investment is that investment which is affected by the
changes in the level of income.
 The greater the level of income, the larger will be the consumption of
the community.
 In order to produce more consumer goods, more investment has to be
made in capital goods, so that greater output of consumer goods
become possible.
 This induced investment is undertaken both in fixed capital assets and
in inventories.
 The essence of induced investment is that greater income and
therefore greater aggregate demand affects the level of investment in
the economy.

7. Cont…
 Induced investment can be presented diagrammatically as
in the figure given below.
 The figure shows that as income increases investment also
increases and as income decreases investment also
decreases.

8. Thank You