Question

gdp does not include all the economic transaction in it .comment​

Answer 1

Answer:

Surely depreciation of capital is more a symptom of low growth rather than something that needs to be measured by GDP? In a growing economy, depreciating capital is replaced. This doesn't have to be directly, it can be replaced with newer technology or by the firm expanding into more profitable sectors. However, I would think that if GDP is increasing, capital investment will be being renewed, and vice versa. Thoughts?

Depreciation of capital is a symptom of the fact that things wear down. Whether an economy is growing or not, equipment wears out. Economic growth means that not only is equipment that is wearing out is being replaced, but even more equipment is being added on top of that replacement.

Explanation

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