For the physical capital stock of an economy to remain constant over time,the amount of investment must ________.

Question

Quizplus · Accepted Answer

The amount of investment must be equal to the depreciated value of the physical capital stock for the capital stock to remain constant over time. This is because physical capital stock depreciates over time due to wear and tear, obsolescence, and other factors. Therefore, investments must be made to replace the depreciated capital stock. If the investment exceeds the depreciated value, the capital stock will grow, and if the investment is less than the depreciated value, the capital stock will shrink.

For the Physical Capital Stock of an Economy to Remain