The total amount spent to buy new physical capital and replace ...

[student77]

The total amount spent to buy new physical capital and replace old capital is referred to as
 
  A) net investment.
  B) wealth.
  C) gross investment.
  D) savings.
  E) depreciation.

Question 2

For the past decade, the unemployment rate in Western Europe has been higher than the unemployment rate in the United States.
 
  Based on this fact, is the natural unemployment rate larger in Western Europe or in the United States? Why might the natural rates differ between the two areas?

[owenfalvey]

Answer to Question 1

C

Answer to Question 2

The natural unemployment rate is probably higher in Western Europe than in the United States. A major reason why this difference exists is that unemployment benefit payments in Western Europe are higher than in the United States, so people stay frictionally unemployed longer in Western Europe.