Principles of Macroeconomics / Unit 18 MAC 1726 short lesson, about 20 seconds
Gross Against Net
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The idea
A gross figure counts everything; a net figure subtracts what offsets it. Gross investment includes replacing worn-out capital; net investment is what adds to the capital stock. Net exports subtract imports from exports.
In practice
About half of gross private investment replaces rather than adds.
Where people slip
Comparing a deficit against gross investment understates how much it can displace.
Your place on the trail
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