Some capital produced each year replaces capital that has worn out and therefore does not increase the capital stock of a country. What term is used for the measure of the capital that is produced in a year and that actually increases the country's capital stock?

Question

Quizplus · Accepted Answer

Net investment refers to the portion of total investment that goes beyond simply maintaining the existing capital stock, accounting for the replacement of worn-out or obsolete capital, and thus represents the actual increase in a country's capital stock.

Some Capital Produced Each Year Replaces Capital That Has Worn