Google
Thursday 
October 22, 2020 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
LABOR-LEISURE TRADEOFF: The perpetual tradeoff faced by human beings between the amount of time spent engaged in wage-paying productive work and satisfaction-generating leisure activities. The key to this tradeoff is a comparison between the wage received from working and the amount of satisfaction generated from leisure. Such a comparison generally means that a higher wage entices people to spend more time working, which entails a positively sloped labor supply curve. However, the backward-bending labor supply curve results when a higher wage actually entices people to work less and to "consume" more leisure time.

Visit the GLOSS*arama


NET PRIVATE DOMESTIC INVESTMENT:

Expenditures on capital goods to be used for productive activities in the domestic economy that are undertaken by the business sector during a given time period, after deducting capital depreciation. This is the official item in the National Income and Product Accounts maintained by the Bureau of Economics Analysis measuring net capital investment expenditures. More specifically net private domestic investment is found by subtracting the capital consumption adjustment from gross private domestic investment. Its primary function is to measure the net increase in the capital stock resulting from investment.
Net private domestic investment indicates the total amount of investment in capital by the business sector that is actually used to expand the capital stock. In general, capital depreciation is between 50 to 85 percent of gross investment. This places net private domestic investment in the range of 5 to 10 percent of gross (and net) domestic product. While net private domestic investment is generally positive, meaning gross investment exceeds depreciation, it is possible for negative net investment, meaning depreciation exceeds gross investment.

A Specific Measure

As the three modifiers in this term suggest, net private domestic investment is a relatively specific measure of investment. It is a net (versus gross) measure of private (versus public) domestic (versus foreign) investment.
  • Net: Net private domestic investment includes ONLY the production of capital goods that are not used to replace depreciated capital. Adding capital depreciation (officially the capital consumption adjustment) to net private domestic investment results in gross private domestic investment.

  • Private: Moreover, net private domestic investment measures investment expenditures made by the private sector. Any capital goods purchased by the public, or government, sector is included in government consumption expenditures and gross investment.

  • Domestic: And lastly, net private domestic investment is expenditures on capital goods used in the domestic economy. The alternative is investment expenditures on capital goods used by the foreign sector.

Derived from Gross Investment

The derivation of net private domestic investment can be found by subtracting the capital consumption adjustment from gross private domestic investment. This is analogous to the derivation of net domestic product. In both cases the capital depreciation is subtracted from the gross value to derive the net value. The following equation summarizes the relation between net private domestic investment (NPDI), gross private domestic investment (GPDI), and the capital consumption adjustment (CCA):

NPDI=GPDI - CCA

<= NET NATIONAL PRODUCTNOBEL PRIZE IN ECONOMIC SCIENCES =>


Recommended Citation:

NET PRIVATE DOMESTIC INVESTMENT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2020. [Accessed: October 22, 2020].


Check Out These Related Terms...

     | gross private domestic investment | capital consumption adjustment | capital depreciation | net domestic product | fixed investment | change in private inventories |


Or For A Little Background...

     | gross domestic product, expenditures | investment | investment expenditures | business sector | gross domestic product | production | product markets | National Income and Product Accounts | Bureau of Economic Analysis | National Bureau of Economic Research |


And For Further Study...

     | macroeconomic sectors | circular flow | business cycles | gross domestic product, ins and outs | gross domestic product, income | gross domestic product, welfare | personal consumption expenditures | government consumption expenditures and gross investment | net exports of goods and services | national income | personal income | disposable income | gross national product | real gross domestic product | saving | investment business cycles | investment, production possibilities | unemployment | inflation |


Related Websites (Will Open in New Window)...

     | Bureau of Economic Analysis |


Search Again?

Back to the WEB*pedia


APLS

RED AGGRESSERINE
[What's This?]

Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club wanting to buy either a 50-foot blue garden hose or a turbo-powered vacuum cleaner. Be on the lookout for slow moving vehicles with darkened windows.
Your Complete Scope

This isn't me! What am I?

Helping spur the U.S. industrial revolution, Thomas Edison patented nearly 1300 inventions, 300 of which came out of his Menlo Park "invention factory" during a four-year period.
"When we do the best we can, we never know what miracle is wrought in our life or in the life of another. "

-- Helen Keller, lecturer, author

LISH
last In Still Here
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2020 AmosWEB*LLC
Send comments or questions to: WebMaster