Which of the Following Equations Captures the Aggregate Physical Capital

question 167

Multiple Choice

Which of the following equations captures the aggregate physical capital stock of an economy in the current year,Kcurrent year?

• A) Kcurrent year = (1 + Depreciation rate) × Klast year + I
• B) Kcurrent year = (1 − Depreciation rate) × Klast year + I
• C) Kcurrent year = (1 − Depreciation rate) × Klast year × I
• D) Kcurrent year = (1 − Depreciation rate) × Klast year − I

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Definitions:

Venture

An undertaking that is typically risky but offers the potential for significant rewards, often associated with new businesses or startups.

Capital

Wealth in the form of money or other assets owned by a person or organization or available for purposes such as starting a company or investing.

Equity Investment

involves purchasing shares of a company, thus obtaining ownership interest in that company.

Management Team

A group of individuals at the top level of an organization who are responsible for its overall direction and strategy.