If net investment spending in a nation is zero, we can conclude that:
A)gross investment exceeds the capital consumption allowance.
B)the capital consumption allowance exceeds gross investment.
C)imports equal exports.
D)gross investment equals the capital consumption allowance.
E)no investment goods were produced in the economy.

Question

Quizplus · Accepted Answer

If net investment spending in a nation is zero, it means that gross investment is equal to the capital consumption allowance. This implies that the amount of investment made in the economy is just enough to replace the worn-out capital goods. There is no net addition to the stock of capital goods in the economy.

If Net Investment Spending in a Nation Is Zero, We