Final answer:
A firm's investment in plant, equipment, and R&D due to increased competition is known as business investment, which is essential for economic growth.
Step-by-step explanation:
When a firm invests in plant, equipment, and R&D as a result of increased competition, this is referred to as a business investment. Business investment is crucial for economic expansion, especially during times when consumer demand is high and profits are rising.
It is one of the critical ingredients needed to sustain economic growth. In fact, even during slower economic periods, firms may invest heavily in these areas with the expectation of future profits. For instance, U.S. firms invested $1.4 trillion in new equipment and structures during the sluggish economy of 2009.