When net investment is zero, how will capital stock generally remain?
Answer and explanation
Correct answer: Unchanged
Net investment is the change in capital stock after depreciation is considered. If it is zero, gross investment exactly replaces the capital consumed during the period, leaving no net addition or subtraction. Therefore the capital stock generally remains unchanged, assuming no separate valuation adjustment. It does not automatically double or become negative.
Frequently asked questions
What is the correct answer to this question?
Unchanged
Why is this the correct answer?
Net investment is the change in capital stock after depreciation is considered. If it is zero, gross investment exactly replaces the capital consumed during the period, leaving no net addition or subtraction. Therefore the capital stock generally remains unchanged, assuming no separate valuation adjustment. It does not automatically double or become negative.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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