Explain how gross investment, depreciation, net investment, and the capital stock are related
What will be an ideal response?
The change in the capital stock equals net investment and net investment equals gross investment minus depreciation.
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Which of the following relationships correctly identifies the profit maximization condition of a firm in a perfectly competitive market?
A) Marginal cost < Price = Marginal revenue B) Marginal cost > Price = Marginal revenue C) Marginal cost = Price = Marginal revenue D) Marginal cost = Price < Marginal revenue
The aggregate expenditure model focuses on the relationship between ________ and ________ in the short run, assuming ________ is constant
A) total income; real GDP; the price level B) total spending; real GDP; the price level C) total production; total income; real GDP D) total spending; real GDP; total income