« previous next »

Author Question: Define gross investment and net investment. Discuss the relationship between gross investment and ... (Read 112 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?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

Vaccines prevent between 2.5 and 4 million deaths every year.

Did you know?

Drugs are in development that may cure asthma and hay fever once and for all. They target leukotrienes, which are known to cause tightening of the air passages in the lungs and increase mucus productions in nasal passages.

Did you know?

Although puberty usually occurs in the early teenage years, the world's youngest parents were two Chinese children who had their first baby when they were 8 and 9 years of age.

Position of the lungs within the thoracic cavity; anterior view illustrating regions of the lungs an Position of the lungs within the thoracic cavity; anterior view illustrating regions of the lungs an
Relationship between levels of COHb in blood and concentration of CO in the surrounding air Relationship between levels of COHb in blood and concentration of CO in the surrounding air
Relationship between psychosocial adaptation Relationship between psychosocial adaptation
Relationship Between Physical Activity and Improved Health Benefits Relationship Between Physical Activity and Improved Health Benefits
Relationship between blood and lymph capillaries. Relationship between blood and lymph capillaries.
Relationship Between the Atlas and the Axis. The Dens of the Axis Provides a Pivotal Point Around Wh Relationship Between the Atlas and the Axis. The Dens of the Axis Provides a Pivotal Point Around Wh
Video: Cerebral Cortex Animation

For a complete list of videos, visit our video library