Capital stock 1. The aggregate production capacity of existing capital goods in the economy. Zero or net change 2. Means a constant level in both the capital stock and output. Investments 3. Adjusts the capital stocks to maintain and even increase production and the level of the economic activities. Savings 4. The unspent portion of income during the period intended for spending. Simple savings equation 5. Serves to emphasize the inverse relationship between the level of outflow and the amount of income generated in circular flow. Investment demand 6. Is inversely proportional to the interest rate level. Principle 7. States that the level of investment is a function of desired changes in the output. Joseph Shumpeter 8. Describes innovation as the introduction of an unfamiliar product and untested technology. Profit 9. The basic reason why businessman invests. Perceptive investors 10. Delves into technology changes, anticipates turning points in the business environment and decides the magnitude and type of investment one should make.
6.2 MULTIPLE CHOICE
F 1. Interest rate
A 2. Innovation
H 3. Recession
E 4. SEC
B 5. BOI
D 6. Multiplier
I 7. MPC
K 8. Consumption function
J 9. Capital stock
G 10. Profit
1. What are the Determinants of Saving?
The determinants of savings are the price level which can affect expenditure and savings, the population growth which may change the level of savings depending on the well-being of the economy and the family income.
2. What are the Investment Demand Determinants?
The investment demand determinants are the interest rate, the acceleration principle, innovations, profit and expectations.
3. What are the general registration requirements of investors setting up business in the country?
The general registration requirements of investors setting up business in the country are Registration of Corporations and Partnerships, Registration of Business Name/Single Proprietorship, Registration for incentives availment under Executive Order 559, Registration of export firms, Securing Tax Identification Number, Securing locational clearance/business permit for firms locating in Metro Manila, Securing building permit and license to do business, Securing employer’s SSS Number, Securing membership in the government health care benefits system, Securing electric services connection and Securing Water Services.
4. Why are investments important? Why do countries like Vietnam, Thailand, Malaysia attract more foreign direct investments than the Philippines? Investments are important because it makes the profit bigger. When someone will invest there would be a great chance for our economy to be more productive which also means more investment, greater employment rate. Moreover less unemployment rate so therefore lesser possibility for poverty to occur. Countries like Vietnam, Thailand and Malaysia attracts more foreign direct investments because those countries are already developed countries while Philippines is under developing state. Aside from that, Vietnam, Thailand and Malaysia has the attractive destination for investors and they also have large labour forces and strong domestic markets that attract the foreign investors to invest there.
5. If you were the Secretary of Trade and Industry, how would you promote more investments?
If I were the secretary of Trade and Industry, I would try to improve our products more. Make different programs or tutorials in making different products for a better trading in the country. Or maybe in improving the places of investment here in the Philippines. Endorsing and highlighting or beauty spots here, making the best out of it. And when the investors could see that the products are good or perhaps the place of investment is conducive there would be a greater possibility for them to invest.