Use the concepts of gross investment and net investment to distinguish between an economy that has a rising stock of capital and one that has a falling stock of capital. ""In 1933 net private domestic investment was minus $6 billion. This means that in that particular year the economy produced no capital goods at all.""

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Business

Kaylee Garcia

14 September, 15:45

Use the concepts of gross investment and net investment to distinguish between an economy that has a rising stock of capital and one that has a falling stock of capital. ""In 1933 net private domestic investment was minus $6 billion. This means that in that particular year the economy produced no capital goods at all.""

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Annalise Figueroa · Answer 1

The statement is false

Explanation:

The economy in 1933 had negative investment, but that doesn't mean that it didn't produce any capital goods during the year.

A negative net investment means that the money invested in new capital goods was less than the depreciation of existing capital goods. Theoretically it can also result form no new capital gains, but in real life that doesn't happen.