If gross investment is positive, it means that firm (or the economy) is must be expanding.

Question

Quizplus · Accepted Answer

Gross investment can be positive even in a contracting economy if it is offset by depreciation or the replacement of existing capital. Gross investment is a measure of the total amount of investment made in new capital goods in a given period, regardless of whether it is being used to expand existing capacity or replace depreciated assets. Therefore, positive gross investment alone is not sufficient to indicate an expanding economy.

If Gross Investment Is Positive, It Means That Firm (Or