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15 April, 14:12

use the concepts of gross and net investment to distinguish between an economy that has a rising stock of capital and one that has a falling stock of capital. Explain: "Though net investment can be positive, negative, or zero, it is impossible for gross investment to be less than zero."

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  1. 15 April, 16:38
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    Gross investment can be zero but never negative because it is the investment in the capital stock.

    Explanation:

    Gross investment in a country is the amount that has been spent by the economy on the fixed assets of the economy in a given period of time. It is the addition done to the total capital stock of the country in a particular period of time.

    So this shows that it can be zero meaning that no amount is spent on the addition of the capital stock in a particular period of time but it can never be negative.
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