If the Economy's Capital Stock Decreases Over Time

question 226

Multiple Choice

If the economy's capital stock decreases over time

• A) net investment is positive.
• B) depreciation is less than zero.
• C) depreciation exceeds gross investment.
• D) gross investment equals net investment.

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Definitions:

Rate of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment's initial cost.

Compounded Semi-annually

A method of calculating interest where the interest is added to the principal twice a year, resulting in interest being earned on interest.

Compounded Semi-annually

Denotes the method of applying interest to a principal sum at mid-year and end of the year.

Ordinary General Annuity

A stream of equal payments made at regular intervals over a fixed period of time, where the payment period coincides with the interest period.