Which of the following describes the amount of new capital that is added to an economy?

Choose 1 answer:
(A) Stock of capital
(B) Investment
(C) Gross investment

D Net investment
(E) Depreciation

Question

Which of the following describes the amount of new capital that is added to an economy?

Choose 1 answer:
(A) Stock of capital
(B) Investment
(C) Gross investment

D Net investment
(E) Depreciation

Accepted Answer

***D*** ∻Key Concept∻ ⚹Net Investment⚹ ∻Explanation∻ ⚹Net investment is the amount of new capital added to the economy, calculated as total gross investment minus depreciation. It reflects the increase in the capital stock after accounting for the capital that has been used up or worn out. The formula for net investment is given by $NI = GI - Depreciation$, where $NI$ is net investment, $GI$ is gross investment, and depreciation is the capital that has been consumed over the period.⚹◊What impact does an increase in gross investment have on a country's GDP in the short and long run?⍭ Generate me a similar question◊

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