In 2007, France's GDP totaled $1.9 trillion and in 2006 GDP was $1.8 trillion. The total amount spent on new capital in 2007 was $357 billion and in 2006 was $335 billion. Suppose that depreciation is 12 percent of GDP. ________ investment in 2007 was ________ billion.
A) Gross; $216
B) Gross; $129
C) Net; $228
D) Net; $129

Question

Quizplus · Accepted Answer

Net investment is calculated by subtracting depreciation from gross investment. Depreciation for 2007 is 12% of the GDP of $1.9 trillion, which is $228 billion. Gross investment in 2007 is $357 billion. Therefore, net investment = $357 billion - $228 billion = $129 billion.

In 2007, France's GDP Totaled $1