Investment Investment is gross private domestic investment. It is spending during the year on current output that is not used for current consumption. It is things like new physical capital. It is purchased by firms and used to produce goods and services. Changes in firms inventories are a category of investment.
Inventories are stocks of goods in progress.
Government Purchases Also known as government consumption and gross investment. It is spending by all levels of government for goods and services. It is interaction of the US economy with the rest of the world. It is the value of US exports minus the value of US imports. It includes the trade of merchandise and invisibles.