What is the net investment?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Gross investment - depreciation.
Gross investment refers to the total spending on new capital goods, including machinery, buildings, and infrastructure. Depreciation accounts for the reduction in the value of capital due to wear and tear over time. Net investment, therefore, represents the actual increase in the economy’s productive capacity after accounting for the depreciation of existing capital. It indicates the growth in the stock of capital assets, which contributes to economic development.