The total value of all capital goods newly produced in a given period is
A) the change in business inventories.
B) depreciation.
C) net investment.
D) gross investment.

Question

Quizplus · Accepted Answer

The total value of all capital goods newly produced in a given period is gross investment. Gross investment includes both the replacement of depreciated capital goods and the addition of new capital goods. Option A is incorrect because it refers to the change in business inventories, which is a measure of the change in the level of unsold goods. Option B is incorrect because it refers to the decrease in value of already existing capital goods due to wear and tear. Option C is incorrect because it refers to the net change in the stock of capital goods, which includes both gross investment and the disposal of existing capital goods.

The Total Value of All Capital Goods Newly Produced in a Given