If an economy's investment (I) is $800, depreciation (δ) is $150, and its savings (S) is $600, what is the change in the capital stock (ΔK) over a period?A.$150B.$250C.$450D.$650
Question
If an economy's investment (I) is 150, and its savings (S) is 150B.450D.$650
Solution
The change in the capital stock (ΔK) over a period is calculated as the difference between investment (I) and depreciation (δ).
So, ΔK = I - δ
Substituting the given values:
ΔK = 150 ΔK = $650
So, the correct answer is:
D. $650
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