Gross Investment
Gross Investment is referred to the total expenditure or investment that is made by an organization to acquire capital goods.
Gross investment is the gross value for such expenditure and it does not take the factor of depreciation into consideration. However, any actual change in the stock of productive assets for a given year of an economy is not represented by Gross Investment.
Net Investment is estimated by subtracting the depreciation value from the gross investment (Gross Investment – Depreciation).
If the value of the gross investment is higher than the value of depreciation at any given time period, it shows that the net investment is positive, and the capital stock has increased. Similarly, if the gross investment value is less than the depreciation value, it shows that the net investment becomes negative, which leads to falling in capital stock.
Introduction to Macroeconomics
Macroeconomics is a part of economics that focuses on how general economies, markets, or different systems that operate on a large scale behave. Macroeconomics concentrates on phenomena like inflation, price levels, rate of economic growth, national income, gross domestic product (GDP) and changes in unemployment.
“Macroeconomics is that part of economics which studies the overall averages and aggregates of the system”. – KE Boulding