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What does gross private domestic investment measure

What does gross private domestic investment measure
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Our GDP computes of four different factors they are a) Consumption b) Investment c) Government expenditure d) Net Exports.

Gross private domestic investment measure the total investment component of the GDP. It is mainly the amount the private firms in the economy invested in the purchase of fixed property or inventory. These are the expenditure by the firm which will enable them to meet the future demand. HIgher the investment higher, the inventory or capacity of the firms to meet the increased demand will be. LOwer the investment lower the inventory and ability to meet a certain spike in demand will be.

Higher gross private domestic investment means higher GDP and a higher consumption in the economy.

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