If for a given year gross investment is $300 billion and depreciation is $75 billion,then,for that year,the capital stock ________ and net investment was ________.

Question

Quizplus · Accepted Answer

Gross investment represents the total amount of investment in the economy, while depreciation represents the amount of capital that has been used up in the production process in that year. Therefore, to calculate net investment, we subtract depreciation from gross investment: $300 billion - $75 billion = $225 billion. As a result, the capital stock increases by the amount of gross investment ($300 billion) minus the amount of depreciation ($75 billion), which is equal to $225 billion. Therefore, the correct answer is B.

If for a Given Year Gross Investment Is $300 Billion