Suppose that net investment is greater than zero. We know that:

Question

Quizplus · Accepted Answer

Net investment is defined as gross investment minus depreciation or consumption of fixed capital. If net investment is greater than zero, it means that gross investment (the amount of resources being used to increase the capital stock) is greater than consumption of fixed capital (resources being used up in the production process). Therefore, the nation's capital stock has grown. Option A is correct. Option D is not necessarily true, as consumption of fixed capital could still be positive but lower than net investment.

Suppose That Net Investment Is Greater Than Zero