« previous next »

Author Question: Define gross investment and net investment. Discuss the relationship between gross investment and ... (Read 168 times)

mcmcdaniel

  • Hero Member
  • *****
  • Posts: 550
on: Jun 29, 2018
Define gross investment and net investment. Discuss the relationship between gross investment and net investment.
 
  What will be an ideal response?

Question 2

Assume the inflation rate falls from 4 percent to 2 percent. This means that
 
  A) the price level has fallen.
  B) the price level is increasing more slowly.
  C) the economy is experiencing deflation.
  D) real GDP is decreasing.
Macroeconomics: Principles, Applications and Tools ¦ O'Sullivan, Sheffrin, Perez ¦ 7th Edition
Buy Test-Bank


zhanghao

  • Sr. Member
  • ****
  • Posts: 316
Reply #1 on: Jun 29, 2018
Answer to Question 1

Gross investment is the total amount spent on new capital goods to increase the quantity of capital and replace the depreciated capital. Net investment is the amount spent on new capital that exceeds the value of the depreciated capital or, in other words, net investment equals gross investment minus depreciation. Net investment is equal to the change in the capital stock.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

Did you know?

Computer programs are available that crosscheck a new drug's possible trade name with all other trade names currently available. These programs detect dangerous similarities between names and alert the manufacturer of the drug.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

Lower drug doses for elderly patients should be used first, with titrations of the dose as tolerated to prevent unwanted drug-related pharmacodynamic effects.

Relationship of the spindle-assembly checkpoint (SAC) with the cell-cycle machinery Relationship of the spindle-assembly checkpoint (SAC) with the cell-cycle machinery
In 2009, historian Woody Holton described how Abigail Adams shrewdly invested in the Continental Con In 2009, historian Woody Holton described how Abigail Adams shrewdly invested in the Continental Con
The Power and Control Wheels of Abusive Relationships When one person in a relationship repeatedly ... The Power and Control Wheels of Abusive Relationships When one person in a relationship repeatedly ...
The relationship between the crankshaft position (CKP) sensor and the camshaft position (CMP) sensor ... The relationship between the crankshaft position (CKP) sensor and the camshaft position (CMP) sensor ...
The relationship of substrate con- version (as measured by optical density) to the amount of patient ... The relationship of substrate con- version (as measured by optical density) to the amount of patient ...
Relationship between thymidylate synthase and enzymes of tetrahydrofolate metabolism Relationship between thymidylate synthase and enzymes of tetrahydrofolate metabolism
Video: Miller's reaction chamber experiment Animation

For a complete list of videos, visit our video library