ne HW3-ECON 2000-03 Princi HW 3 Help a. Which of the following statements Is tru
ID: 1141255 • Letter: N
Question
ne HW3-ECON 2000-03 Princi HW 3 Help a. Which of the following statements Is true? Gross private domestic Investment plus depreciation is net private domestic investment. o Net private domestic investment less depreciation is gross private domestic investment Gross private domestic investment divided by depreciation is net privete domestic investment Gross private domestic investment less depreciation is net private domestic investment b. f you were to determine net domestic product (NDP) through the expenditures approach, the correct measure spending to use is gross private domestic investment beceuse it excludes depreciation. Onet private domestic investment because it excludes depreciation. gross private domestic Investment because it includes depreclation net private domestic investment because it includes depreciation. Prey 30, 14 Next > 7 3Explanation / Answer
a) Gross private domestic investment less depreciation is net private domestic investment.
Difference between Gross investment and Net investment is Depreciation. So, Gross investment - Depreciation = Net investment.
b) Net private domestic investment because it excludes depreciation.
Net domestic product = GDP - Depreciation
NDP does not include depreciation. So, investment would be taken into account which excludes depreciation.
c) Real GDP
This is because it takes into account goods and services rather than monetary value of goods. Real GDP is not affected by the price.
c) A measure of the price of a specific collection of goods and services compared to the price of highly similar collection of goods and services in a reference year.
d) Price index = Nominal GDP/Real GDP
Real GDP = Nominal GDP/Price index
Therefore, Real GDP is Nominal GDP divided by the price index.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.