Essay On C2 Level Writing

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In system of reproduction, regardless of its public form, investments the major role in renewal and increase in production resources, and, therefore, and ensuring certain rates of economic growth belongs. If to present public reproduction as system of production, distribution, an exchange and consumption, investments, mainly, concern the first link – production, and, it is possible to tell, make a material basis of its development.

The big share of investment activity is the share of construction sector of economy. Therefore it is necessary to specify a role and value in reproduction process of such categories as capital investments and capital construction.

Process of formation and use of investment resources covers a certain period which it is accepted to call an investment cycle. If to consider real investments, it includes the following stages: scientific development; design; construction; development. It can be presented the following scheme (the scheme.

Wrong investments mean squandering of resources as connect them in projects which will not lead to the planned growth of economy. And, of course, they are not a reliable source of workplaces in the long term.

Besides that investments influence overall effectiveness of managing and possibility of growth in the long term, they also make direct and fast impact on employment and the income. For example, if investments into construction decrease, unemployment among construction workers grows, their cumulative income decreases, therefore, also their demand for the goods and services made in other branches is reduced. It leads to reduction of the income and decrease in employment in these branches. Besides, reduction of investments into construction makes negative impact on those branches which deliver materials for the construction, for subsuppliers for branch of construction materials, etc.

Division of capital investments into new construction and into reconstruction is adjoined by their division into investments of extensive and intensive type. The investments aiming at increase in output on the basis of the existing equipment and technology are called as investments of extensive type. Investments of this type demand attraction of additional quantity of raw materials, workers, energy is proportional to increase in outputs that conducts to growth of number of workplaces and does not reduce a capital intensity and cost of production. Investments of intensive type are understood as those investments which provide introduction of the new or improved equipment and technology, use of internal reserves of production, reduction of losses.

Capital investments represent set of the expenses connected with creation and updating of the fixed assets of a national economy intended for development of economy. They represent broader concept, than capital construction.

Growth of intensive type of investments is a factor of fast increase of a material standard of living. As the growing production device increases labor productivity. So today's welfare is result, substantially, of yesterday's investments, and today's investments, in turn, lay the foundation of tomorrow's increase in labor productivity and increase of welfare.

The reconstruction share in capital investments at us raises, but is even lower, than in the developed countries, first of all in the USA. In order that reconstruction of the enterprises took the place appropriate to it, it is necessary to provide it as an obligatory stage of long-term development of each enterprise, how capital repairs of the building and the equipment of the enterprise are planned. It is desirable that implementation of reconstruction and modernization would coincide and in time with capital repairs.

The concept of investment resources covers all made means of production, i.e. all types of the tool, car, the equipment, factory, warehouse, the vehicles and a marketing network used in production of goods and services and their delivery to the end user. Process of production and accumulation of these means of production is called as investment.

Insufficiency of economic resources involves the general requirement of economy of resources. It means that the economy often deals with a choice. We cannot have everything that we want, at once. It is about a choice between today's consumption and saving of resources to have opportunity more to consume tomorrow.