Net Investment plus Depreciation gives an estimate of which of the following?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. Gross investment.
Net Investment plus Depreciation gives an estimate of Gross Investment. Gross Investment represents the total amount spent on acquiring or upgrading physical assets, including both the replacement of depreciated assets and the addition of new ones. It reflects the total investment in the economy, without accounting for the depreciation of existing capital. Net Investment, on the other hand, only includes new additions to the capital stock after accounting for depreciation. Adding depreciation to Net Investment provides the total Gross Investment.