In the Solow model,net investment is defined as:
A)investment plus capital depreciation.
B)investment minus capital depreciation.
C)the saving rate minus the depreciation rate.
D)the saving rate plus the depreciation rate.
E)none of the above

Question

Quizplus · Accepted Answer

Net investment is defined as the difference between investment and capital depreciation. This is because investment contributes to the capital stock while depreciation reduces it, and net investment captures the overall change in the capital stock over time. Therefore, choice B, investment minus capital depreciation, is the correct definition of net investment in the Solow model.

In the Solow Model,net Investment Is Defined As