Let net investment based on the accelerator principle predict that net investment will equal twice the change in GDP in a given year. If GDP is expected to climb from $2 to $2.2 trillion with an initial capital stock of $3 trillion facing an annual rate of depreciation of 10 percent, then gross investment should be expected to be somewhere in the neighborhood of
A) $300 billion.
B) $400 billion.
C) $520 billion.
D) $620 billion.
E) $700 billion.

Question

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The Answer of Let net investment based on the accelerator principle predict that net investment will equal twice the change in GDP in a given year. If GDP is expected to climb from $2 to $2.2 trillion with an initial capital stock of $3 trillion facing an annual rate of depreciation of 10 percent, then gross investment should be expected to be somewhere in the neighborhood of
A) $300 billion.
B) $400 billion.
C) $520 billion.
D) $620 billion.
E) $700 billion.

Let Net Investment Based on the Accelerator Principle Predict That