Macroeconomics
13th Edition
ISBN: 9780134744452
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 7, Problem 1SPA
To determine
Identify the values of gross investment,
Expert Solution & Answer
Explanation of Solution
The total amount of money spent on the new capital is gross investment. During the period of 2018, M has purchased $500,000 of new servers. Thus, the gross investment in 2018 is $500,000. At the same time, the market value of older servers falls by $100,000. This means that the depreciation of the older servers is $100,000. Since the gross investment is $500,000 and the depreciation is $100,000, the net investment is $400,000
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Students have asked these similar questions
An economy’s capital stock was $46.3 billion at the end of 2016, $46.6 billion at the end of 2017, and $47.0 billion at the end of 2018. Depreciation in 2017 was $2.4 billion, and gross investment during 2018 was $2.8 billion.
a) Calculate the gross investment during 2017
b) Calculate the net investment during 2017
Question 2
(a) Michael is an Internet service provider. On December 31, 2009, he bought an existing business with servers and a building worth $400,000. During his first year of operation, his business grew and he bought new servers for $500,000. The market value of some of his older servers fell by $100,000.
What was Michael’s:
(i) gross investment during 2010
(ii) depreciation during 2010
(iii) net investment during 2010
(iv) capital at the end of 2010
If the gross investment in a year is $1000 and depreciation in a year is $50 then what is the value of net investment?
Chapter 7 Solutions
Macroeconomics
Ch. 7.1 - Prob. 1RQCh. 7.1 - Prob. 2RQCh. 7.1 - Prob. 3RQCh. 7.1 - Prob. 4RQCh. 7.2 - Prob. 1RQCh. 7.2 - Prob. 2RQCh. 7.2 - Prob. 3RQCh. 7.2 - Prob. 4RQCh. 7.2 - Prob. 5RQCh. 7.3 - Prob. 1RQ
Ch. 7.3 - Prob. 2RQCh. 7.3 - Prob. 3RQCh. 7.3 - Prob. 4RQCh. 7.3 - Prob. 5RQCh. 7.3 - Prob. 6RQCh. 7.4 - Prob. 1RQCh. 7.4 - Prob. 2RQCh. 7.4 - Prob. 3RQCh. 7 - Prob. 1SPACh. 7 - Prob. 2SPACh. 7 - Prob. 3SPACh. 7 - Prob. 4SPACh. 7 - Prob. 5SPACh. 7 - Prob. 6SPACh. 7 - Prob. 7SPACh. 7 - Prob. 8SPACh. 7 - Prob. 9SPACh. 7 - Prob. 10SPACh. 7 - Prob. 11SPACh. 7 - Prob. 12SPACh. 7 - Prob. 13APACh. 7 - Prob. 14APACh. 7 - Prob. 15APACh. 7 - Prob. 16APACh. 7 - Prob. 17APACh. 7 - Prob. 18APACh. 7 - Prob. 19APACh. 7 - Prob. 20APACh. 7 - Prob. 21APACh. 7 - Prob. 22APACh. 7 - Prob. 23APACh. 7 - Prob. 24APACh. 7 - Prob. 25APACh. 7 - Prob. 26APACh. 7 - Prob. 27APACh. 7 - Prob. 28APACh. 7 - Prob. 29APACh. 7 - Prob. 30APA
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