Suppose that net investment in 2012 was $20 billion and depreciation was $4 billion.Gross investment in 2012 was
A)$16 billion.
B)$20 billion.
C)$24 billion.
D)$28 billion.

Question

Quizplus · Accepted Answer

Gross investment is the total amount spent on new capital goods. It is calculated by adding net investment and depreciation to give the total investment that was made during the year. Therefore, gross investment in 2012 would be $20 billion (net investment) + $4 billion (depreciation) = $24 billion.

Suppose That Net Investment in 2012 Was $20 Billion and Depreciation