Discussion
What does the term 'Gross Investment' mean while denoting a nation's economy ?
Answer: A
Gross Investment = Net Investment + Depreciation.
Gross investment is the total spending on new capital goods in a period. Part of it only replaces capital worn out during the period, which is depreciation (consumption of fixed capital); the rest adds to the capital stock and is net investment. So gross investment is net investment plus depreciation.
Option B subtracts depreciation, which gives a figure below net investment. Option C reverses the relationship, and option D adds savings, a different concept, to depreciation.
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