Economy A: gross investment equals depreciation Economy B: depreciation exceeds

Question

Economy A: gross investment equals depreciation Economy B: depreciation exceeds gross investment sEconomy C: gross investment exceeds depreciation Refer to the above information. Positive net investment is occurring in: economy A only. economy B only. economy C only. economies A and B only. Other things equal, the above information suggests that the production capacity in economy: B is growing more rapidly than either A or C. A is growing more rapidly than either B or C. A is growing less rapidly than economy B. C is growing more rapidly than economy B.

Explanation / Answer

Net domestic produce = GDP - Depreciation

So,

Economy A => GDP = 0

Economy B +> GDP < 0

Economy C => GDP > 0

Hence, option C

Now, This also shows that economy C > economy A > economy B

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