In 1933 net private domestic investment was a minus $5.8 billion.This meant that

Question

Quizplus · Accepted Answer

Net private domestic investment is calculated by subtracting depreciation from gross private domestic investment. If net private domestic investment is negative, it means that the economy used up more capital goods than it produced in that year. Therefore, option C is correct. Option A is incorrect because net private domestic investment is not the same as the difference between gross private domestic investment and depreciation. Option B is incorrect because a negative net private domestic investment does not necessarily mean that the economy was contracting in that year. Option D is incorrect because the economy still produced capital goods, but it used up more capital goods than it produced.

In 1933 Net Private Domestic Investment Was a Minus $5