If gross investment is greater than depreciation,then net investment is _____________ and the economy is __________________.

Question

Quizplus · Accepted Answer

Gross investment refers to the total amount of investment made by an economy in a specific time period while depreciation refers to the decrease in the value of capital due to wear and tear. Net investment is calculated by subtracting the amount of depreciation from gross investment. If gross investment is greater than depreciation, then net investment would be positive, indicating that the economy is increasing its stock of capital. This implies economic expansion since the economy has more resources to produce goods and services in the future. Therefore, the correct answer is A) positive, expanding.

If Gross Investment Is Greater Than Depreciation,then Net Investment Is