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

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The change in the country's capital stock during a year is equal to net investment, which is the amount spent on new capital goods minus the amount of capital goods that wear out or become obsolete (known as capital consumption allowance). Gross investment includes both new investment and replacement investment, while gross fixed investment only includes new investment in fixed assets. Net change in inventories plus capital consumption allowance is a component of national income accounting, but not specifically related to the investment component of GDP.

Consider the Investment Component of GDP