« previous next »

Author Question: Explain the relationship among the capital stock, gross investment, net investment, and ... (Read 117 times)

ts19998

  • Hero Member
  • *****
  • Posts: 531
on: Jun 29, 2018
Explain the relationship among the capital stock, gross investment, net investment, and depreciation.
 
  What will be an ideal response?

Question 2

If the price level for the last three months has been 112, 125, and 126, we would say
 
  A) inflation has been constant over the three months.
  B) inflation was more rapid between the first and second month than between the second and third month.
  C) inflation was less rapid between the first and second month than between the second and third month.
  D) inflation has steadily increased over the three months.


shaikhs

  • Sr. Member
  • ****
  • Posts: 312
Reply #1 on: Jun 29, 2018
Answer to Question 1

The capital stock is the total quantity of plant, equipment, buildings and inventories. Some of this capital stock is always depreciating or wearing out. During a year a firm will purchase new capital. The amount of capital purchased is gross investment. The amount of gross investment minus the amount of depreciation during a year is net investment. So net investment is the change in the capital stock from one period to the next.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

When intravenous medications are involved in adverse drug events, their harmful effects may occur more rapidly, and be more severe than errors with oral medications. This is due to the direct administration into the bloodstream.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

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?

According to the Migraine Research Foundation, migraines are the third most prevalent illness in the world. Women are most affected (18%), followed by children of both sexes (10%), and men (6%).

Natural capital degradation Natural capital degradation
Relationship between the number of CAG repeats in a gene and the age of onset of Huntington disease. Relationship between the number of CAG repeats in a gene and the age of onset of Huntington disease.
5-4 The relationship between vapor pressure and temperature—in this case for water. As the ... 5-4 The relationship between vapor pressure and temperature—in this case for water. As the ...
Saving and Investment Rates of Industrialized Countries, 1960–1974 Saving and Investment Rates of Industrialized Countries, 1960–1974
Relationship of Sun Angle and Solar Radiation Relationship of Sun Angle and Solar Radiation
ADHD (Stock photo) ADHD (Stock photo)
Video: Epinephrine/NE (heart rate, altered blood flow, glycogenolysis & bronchodilation)

For a complete list of videos, visit our video library