Describe the three different reasons that investment can rise. Explain how one of these three changes could be undesireable in terms of promoting the economic health and strength of the economy

Investment can rise as a result of: (1 ) an increase in business purchases of new capital goods; (2 ) the purchase of new residential housing by individuals; and (3 ) an increase in inventory investment by firms. An increase in inventory investment could result from increases in planned inventory investment or increases in unplanned inventory investment. An increase in unplanned inventory investment would be undesireable in terms of economic health as it is a reflection of the overproduction of output produced by firms compared to buyers' purchases (resulting in an increase in inventories).