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The Actual Benefit of a Government Subsidy Is Determined Primarily

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The actual benefit of a government subsidy is determined primarily by

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Definitions:

Gross Investment

The total amount spent on purchases of new capital and on replacing depreciated capital within an economy.

Net Investment

The sum of money used to purchase new capital assets, subtracting the depreciation from current capital assets.

Depreciation

The reduction in the value of an asset over time, due in particular to wear and tear.

Expenditures Approach

A method of calculating GDP that totals consumption, investment, government spending, and net exports.

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