Induced Autonomous Investment

Difference between Induced and Autonomous Investment

Basics	Induced Investment	Autonomous Investment
1. Profit	It depends upon the profit expectations of the entrepreneurs.	It does not depend upon profit.
2.Income elasticity	An increase in the level of income raises the level of induced investment and vice-versa. In other words. Its curve slopes upwards.	Autonomous investment is Unaffected by the changes in the level of income. In other words, it is perfectly income inelastic. It is income elastic. Its graph is parallel to the X-axis.
3. Sector	Induced investment is generally undertaken in the private sector as private investment, which depends upon the marginal efficiency of capital and the market rate of interest.	Most of investment made by the government as public investment is autonomous investment, which is motivated by public welfare.
4. Determining factors	Besides income, induced investment depends upon the innovations, the innovations, the government taxation policy, the size as well as composition of the population etc. Political climate also affects also investment. Instability of the government causes a great hevok.	Autonomous investment depends upon socio- economic and political conditions in the country. Increase in the government budget allocations due to improvement in technology, the discovery of new resources, the growth of population or the autonomous investment. Otherwise may also change. Consequently, its curve may shift upwards or downwards.

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