THE ROLE AND FUNCTIONS OF INVESTMENTS IN CONTEMPORARY ECONOMIC SYSTEM

Abstract

In this article, our goal is to identify the role and functions of investments in contemporary economic system. Both at the macro and micro level of the economy, investments are among the most important economic tools and are considered important components of the country's national income, which have a significant impact on ensuring stable and dynamic economic growth. Investment is one of the most fundamental and changing components of GDP. From an economic point of view, investments represent the allocation of capital with the aim of increasing it in the future, which should be sufficient to compensate for the temporary abandonment of the use of the invested funds, to cover the losses arising from the risks and to compensate for possible future losses due to inflation. Based on the research of different definitions, we can define investments as the allocation of capital in various sectors and branches of the economy, in entrepreneurial and other types of activity objects, with the aim of obtaining income, as well as achieving other economic or non-economic results. Investments perform a number of important functions, namely: regulatory, promoting, distributing and indicative, which ensure the sustainable development and progress of the economic system.