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Author Question: Explain the difference between the capital stock, gross investment, depreciation, and net ... (Read 125 times)

tatyanajohnson

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on: Jun 29, 2018
Explain the difference between the capital stock, gross investment, depreciation, and net investment.
 
  What will be an ideal response?

Question 2

In a perfectly competitive market, there are
 
  A) many buyers and many sellers.
  B) many buyers, but there might be only one or two sellers.
  C) many sellers, but there might be only one or two buyers.
  D) one firm that sets the price for the others to follow.


Ahernandez18

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The capital stock is the total quantity of plant, equipment, buildings, and inventories. Gross investment is the purchase of new capital. Depreciation is the wearing out and scrapping of capital. Net investment equals gross investment minus depreciation. The change in the capital stock from one period to the next equals net investment.

Answer to Question 2

A


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