Asked by Isaiah Tijero on May 22, 2024
Verified
Net investment is greater than gross investment
A) every year.
B) most years.
C) some years.
D) never.
Net Investment
The total investment in new capital minus depreciation on existing capital, measuring the growth in the stock of productive assets in an economy.
Gross Investment
Total expenditure on new fixed assets and inventories within a specific period, without deducting depreciation.
- Master the subject of gross and net investment and their impact on economic dynamics.
Verified Answer
SS
Sascha StutzMay 25, 2024
Final Answer :
D
Explanation :
Net investment is the amount of investment spending that adds to the stock of capital, while gross investment includes both the addition to the capital stock and the amount spent on replacing depreciated capital. Therefore, net investment can never be greater than gross investment because gross investment includes net investment plus depreciation.
Learning Objectives
- Master the subject of gross and net investment and their impact on economic dynamics.