In the economy,the level of capital will increase if
A) depreciation is zero.
B) investment is positive.
C) investment is larger than net investment.
D) net investment is larger than investment.
E) net investment is positive.

Question

Quizplus · Accepted Answer

Net investment represents the amount by which gross investment exceeds depreciation. Therefore, if net investment is positive, it means that investment is adding to the level of capital (gross investment is more than depreciation) and thus the level of capital will increase.

In the Economy,the Level of Capital Will Increase If