Question

When an economy's capital stock is expanding: 1) GDP exceeds GNI 2) GNI exceeds GDP 3)...

When an economy's capital stock is expanding:

1) GDP exceeds GNI

2) GNI exceeds GDP

3) net exports is a positive amount

4) GNI, but not necessarily GDP, is rising

5) gross investment exceeds depreciation

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Answer #1

Please give ratings it will be appreciable, for any query please comment, Thank you

Solution,

Capital Stock is the amount of capital used to produce good and services. it makes labour productive.

Change in capital stock depends upon the difference in gross investment and capital depreciation. when capital investment(gross investment) exceed the capital depreciation then the capital stock is expanding.

the correct option is 5). Gross investment exceeds depreciation

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