Which of the Following Statements Is Correct

question 52

Multiple Choice

Which of the following statements is correct?

• A) Gross investment minus financial capital equals net investment.
• B) Net investment plus depreciation equals gross investment.
• C) Net investment plus corporate profits equals gross investment.
• D) Net investment is greater than gross investment.
• E) Net investment minus depreciation equals gross investment.

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Definitions:

Monetary Policy

The process by which a central bank controls the supply of money in an economy, typically targeting inflation, employment, and economic growth.

Potential Level

The potential level of output, or potential GDP, is the maximum amount of goods and services an economy can produce when it is fully utilizing its resources, without causing inflation to rise.

Fixed-growth-rate Monetary Policy

A monetary policy framework aiming to maintain a predetermined rate of growth in the money supply.

Active Fiscal Policy

Government policy that involves altering government spending and taxation to influence the economy.