If the economy's capital stock decreases over time
A) net investment is positive.
B) depreciation is less than zero.
C) depreciation exceeds gross investment.
D) gross investment equals net investment.

Question

Quizplus · Accepted Answer

If the economy's capital stock decreases over time, it means that depreciation exceeds gross investment. This is because the total amount of capital is reducing, indicating that the amount of capital being worn out or becoming obsolete (depreciation) is greater than the amount of new capital being added (gross investment).

If the Economy's Capital Stock Decreases Over Time