How does investment affect AD?

The initial increase in investment causes a rise in output and so people gain more income, which is then spent causing a further rise in AD. With a strong multiplier effect, there may be a bigger increase in AD in the long-term. In the long term, an increase in investment should also increase productive capacity and increase aggregate supply.

How does AD/as represent long-run economic growth?

In an AD/AS diagram, long-run economic growth due to productivity increases over time is represented by a gradual rightward shift of aggregate supply. The vertical line representing potential GDP—the full-employment level of gross domestic product—gradually shifts to the right over time as well.

What is authorized share capital?

Share capital is only generated by the initial sale of shares by the company to investors. It does not include shares being sold in a secondary market after they've been issued. Authorized Share Capital is the maximum amount of share capital that a company is authorized to raise.

What is the capital of a business?

The capital of a business is the money it has available to pay for its day-to-day operations and to fund its future growth. The four major types of capital include working capital, debt, equity, and trading capital. Trading capital is used by brokerages and other financial institutions.