gross domestic fixed-capital formation

gross domestic fixed-capital formation

the total spending on FIXED INVESTMENT (plant, equipment, etc.) in an economy over a one-year period. Gross domestic fixed-capital formation is one component of GROSS NATIONAL PRODUCT. However, because of CAPITAL CONSUMPTION (fixed capital lost because of wear and tear), net domestic fixed-capital formation may be considerably less than gross investment. In this case, the net addition to the CAPITAL STOCK would be much smaller than the total figure unadjusted for capital DEPRECIATION.

See NET NATIONAL PRODUCT.

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