If gross private domestic investment exceeds depreciation, then

Question

Quizplus · Accepted Answer

Gross private domestic investment represents the total amount spent on new capital goods while depreciation is the decrease in the value of existing capital goods due to wear and tear. If gross private domestic investment exceeds depreciation, it means that more new capital goods are being produced than the amount of old capital goods being used up. This results in an increase in the capital stock, making option D the correct answer.

If Gross Private Domestic Investment Exceeds Depreciation, Then