In 2007, France's GDP totaled $1.9 trillion and in 2006 GDP was $1.8 trillion. The total...

In 2007, France's GDP totaled $1.9 trillion and in 2006 GDP was $1.8 trillion. The total amount spent on new capital each year was $357 billion (2007) and $335 billion (2006). To calculate the amount of net investment in France for these years, you need to know:

A) The amount of financial capital available,

B) Saving,

C) The aggregated production function,

D) Depreciation.

Solutions

Expert Solution

To Calculate the amount of net investment in France we need to know about Depreciation.Hence option d is correct option.

Since GDP includes the final value of goods and services the goods and services depreciate with time. Hence next year calculation of Goods and service should include value after deducting depreciation. Hence depreciation is needed to calculate net investments

jeff jeffy answered 2 years ago

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