Investment Flashcards
1
Q
Investment
Gross Investment
Net Investment
A
The addition to capital stock of the economy
Gross investment is the addition to capital stock, both to replace the existing capital stock which has been used up (depreciation) and the creation of additional capital.
Net Investment = gross investment minus depreciation
2
Q
Accelerator Theory
A
The theory that the level of investment is related to past changes in income.
