Consider the investment component (I_a)of GDP.The change in the country's capital stock during a year is equal to

Question

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The change in the country's capital stock during a year is equal to net investment, which is the difference between gross investment and the capital consumption allowance. Option A (gross investment) only indicates the total amount of investment but does not account for depreciation, while option B (capital consumption allowance) only accounts for depreciation without considering new investment. Option D (net change in inventories plus capital consumption allowance) is too narrow as it only accounts for investment in inventories, while option E (gross fixed investment) only accounts for a specific type of investment.

Consider the Investment Component (Ia)of GDP

Consider the Investment Component (I_a)of GDP