Investment in a country may affect economic progress. If an economy is to progress then the investment should be increased.
Investments to influence changes in incomes, employment, and output growth. Investment can be done by way of purchase of securities (financial investment) and purchases of capital goods (physical investment). Physical investments are expenditures that could increase the amount of capital in an economy within a certain time.
Physical investments can be distinguished as follows:
a. Investment of capital goods and buildings. Investments in the form of capital and the building are also called fixed assets investment. Called fixed asset investment for capital goods and buildings are generally older than one year. The amount of investment that counts is the net investment of fixed capital formation less depreciation.
b. Inventory investment. Inventory investment is also called the planned investment. A company often produce more targeted products to anticipate if demand increases. This production excess included to inventory investment. Inventory investment is expected to increase earnings or profits.

Factors affecting the level of investment
Factors that influence the investment can be explained as follows:
a. Interest rate. The main factor that affects investment is the real interest rate. The real interest rate is the nominal interest rate which has been reduced by inflation figures.
b. Expectations of profit to be achieved. The company invests generally aim for profit. If companies have expectations or hopes of their goods and services products will benefit the investment made will be increased.
c. Costs for capital goods. Costs for capital goods such as operation and maintenance costs were giving the effect on the amount of investment that will be done. If these costs are considered too high then the investment will be decreased. This is because these costs affect the profit to be gained.
d. Technological change. Advances in technology will be a driving factor in making an investment. Various technological discoveries will bring a change in production costs that could ultimately increase profits. Investing too much more done because of the expected benefits.

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