Investment is the component of GDP that must increase to ensure economic growth...but why??

Question

Investment is the component of GDP that must increase to ensure economic growth...but why??

Answer 1

Investments are capital goods, and capital is one of the factors of production - capital produces capital (together with labor) - less investment will mean less capital for production, more investment=more capital for production, thus more output (GDP) and consequently higher growth.

Answer 2

True. Investment is a component of GDP. Ensure economic growth means that the country GDP have to increase constantly over the long period. So, to ensure economic growth the components of the GDP must increase (not only investment!). Why so necessary the investment component? Because this let the country to be available of produce more overtime and this bring more income to the people on the country, conclusion-->economic growth.

Let see it by other point of view. Imagine all other components can increase except investment, imagine consume. How could be more consume of goods if the industries cant produce more (they have to invest to produce more)? If investment don't change,what you have to consume is imports but this reduces the GDP so the growth of GDP will be 0 (GDP=...+Consume-Imports=0)