Economics

Classify the various categories of 'gross private domestic investment'.

Explain what is meant by each briefly. (The Prof. said, " I am not referring to 'net investment' and 'depreciation' when I say various categories.)

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...f the four expenditures (C, I, G, NX), averaging between 12-18% of gross domestic product. There are two main categories of gross private domestic investment: Fixed investment and change in business inventories.

In our case of your previous question, Gross Private Domestic Investment (I) = Gross Fixed Investment + Changes in Bus.Inventories = 378+26=404

FIXED INVESTMENT: Capital investment expenditures for factories, machinery, tools, and buildings.. This is generally about 95-97% of gross private domestic investment and that includes the capital goods that best reflects what most people consider capital investment. This category ...