A nation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end.Consumption of private fixed capital in the year was $25 billion.Assuming stable prices, gross investment was

Question

Quizplus · Accepted Answer

Gross investment is calculated as the change in capital stock plus depreciation (consumption of fixed capital). The change in capital stock is $350 billion - $300 billion = $50 billion. Adding the consumption of fixed capital ($25 billion) gives a gross investment of $75 billion.

A Nation's Capital Stock Was Valued at $300 Billion at the Start