During the year, suppose a country's total purchases of newly produced capital goods are $2,000 million, it issues $1,600 million of stock certificates, and has $500 million in depreciation. Gross investment in this country equals
A) $2,500 million.
B) $2,000 million.
C) $3,600 million.
D) $4,100 million.
E) $2,100 million.

Question

Quizplus · Accepted Answer

Gross investment is calculated as the total purchases of newly produced capital goods without deducting depreciation. Therefore, the gross investment in this country is $2,000 million, which is the total purchases of newly produced capital goods. The issuance of stock certificates and depreciation are not included in the calculation of gross investment.

During the Year, Suppose a Country's Total Purchases of Newly