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Which of the following statements is true? Gross private domestic investment less depreciation is net private domestic investment. Gross private domestic investment divided by depreciation is net private
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Which of the following statements is true? Gross private domestic investment less depreciation is net private domestic investment. Gross private domestic investment divided by depreciation is net private domestic investment. Gross private domestic investment plus depreciation is net private domestic investment. Net private domestic investment less depreciation is gross private domestic investment.\

User Erik Van Zijst
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6 votes

Answer:

Gross private domestic investment less depreciation is net private domestic investment.

Step-by-step explanation:

Investment is addition to capital stock during a period of time. Depreciation is fall in value of fixed (capital) assets due to usage, wear & tear, obsolescence.

Gross Private Domestic Investment = Total addition to capital stock by private domestic sector, without accounting for depreciation of existing capital stock.

Net Private Domestic Investment = Addition to capital stock by private domestic sector, accounting for depreciation deduction of existing capital stock.

So, Gross Private Domestic Investment - Depreciation = Net Private Domestic Investment.

User Ebeland
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