If inﬂows to the capital stock are greater than outﬂows, then
A) net investment is positive.
B) net investment is negative.
C) depreciation equals gross investment.
D) depreciation is greater than gross investment.

Question

Quizplus · Accepted Answer

When inflows to the capital stock are greater than outflows, it means that the capital stock is increasing. This increase is referred to as net investment, and it is positive in this case because more capital is being added to the existing stock.

If Inﬂows to the Capital Stock Are Greater Than Outﬂows