Increases in net investment generally result in

Question

Quizplus · Accepted Answer

Net investment refers to the amount of investment in new capital (such as machinery, buildings, etc.) minus the depreciation on existing capital. An increase in net investment means that more is being invested in new capital than is being lost through depreciation. This leads to a higher level of capital stock (because more capital is being added) and higher levels of depreciation over time (because a larger capital stock will eventually lead to more depreciation as those assets age).

Increases in Net Investment Generally Result in