Suppose the economy's capital increases over the year. It must be true that

Question

Quizplus · Accepted Answer

If the economy's capital increases over the year, it means that the gross investment (which includes both net investment and depreciation) was able to surpass depreciation. Therefore, net investment was positive, making option B the correct answer. We cannot conclude anything about the relative values of gross investment, depreciation, or net investment specifically.

Suppose the Economy's Capital Increases Over the Year