In 2007, France's GDP totalled $1.9 trillion and in 2006 GDP was $1.8 trillion. The total amount spent on new capital in each year was $357 billion (2007) and $335 billion (2006). Suppose that depreciation is 12 percent of GDP. _ _ investment in 2007 was _ billion.

Question

Quizplus · Accepted Answer

Net investment is equal to gross investment minus depreciation. In 2007, gross investment was $357 billion and depreciation was 12% of GDP, which was $1.9 trillion. Therefore, depreciation was $1.9 trillion * 0.12 = $228 billion. Net investment was $357 billion - $228 billion = $129 billion.

In 2007, France's GDP Totalled $1