The Expenditures Approach – Gross versus Net Investment Exercise 2

Suppose an economy starts the year with $100 million in capital, and during the course of a year, it adds $20 million of gross investment. Economists estimate that the depreciation rate for this economy is 9% per year.

a. Calculate depreciation and net investment for this economy.

Depreciation: $ ________ million

Net investment: $_______ million

b. Now calculate the amount of next year’s beginning capital stock for this economy.

$ _________ million


The Expenditures Approach – Net Exports Exercise 2

The table below shows nominal GDP, exports, and imports for the United States.


Nominal GDP??

(billions of dollars)


(billions of dollars)


(billions of dollars)

2013 $17,078.3 $2,324.6 $2,787.5
2014 ????17,703.7 ????2,352.3 ????2,901.5

Instructions:??Round your answers to 1 decimal place. Include a negative sign if necessary.

a. Calculate the value of net exports in 2013.

??????????$??________ ??billion

b. Calculate the value of net exports in 2014.

??????????$??________ billion

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