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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 800,depreciation(δ)is800, depreciation (δ) is 150, and its savings (S) is 600,whatisthechangeinthecapitalstock(ΔK)overaperiod?A.600, what is the change in the capital stock (ΔK) over a period?A.150B.250C.250C.450D.$650

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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 = 800800 - 150 ΔK = $650

So, the correct answer is:

D. $650

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