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What is the current consumption (depreciation) of fixed capital to GDP ratio for the USA and...

Question:

What is the current consumption (depreciation) of fixed capital to GDP ratio for the USA and other major economies, such as EU, Japan, and China?

Consumption of fixed capital:

It is known as ' depreciation' used in business accounts, tax assessment process, national income accounts, etc. It involves the role of fixed capital assets used in generating new output.

Answer and Explanation:

The data provided by the United States Bureau of economic analysis, World Bank and CIA World Factbook for each fiscal year represents:

Current consumption (depreciation) of fixed capital to GDP ratio (in percentage) for the USA:

1. Gross Domestic Product (in the third quarter, 2019) 1.9%.

2. The value of the current cost of fixed assets is 19.50% in the year 2017.

The current value of depreciation for the European Union: The average ratio of gross fixed capital formation to GDP variates around 20% (20.3% in 2017) in the European Union (27 Nations).

The current value of depreciation for the economy of Japan:

The economy of Japan produced $5.6 trillion in the year 2018. The value of fixed capital to the ratio of GDP IS 23.55%. The total population of Japan is 127 million representing a low standard of living as compared to the economy of the United States or Germany.

The current value of depreciation for the economy of China:

The value of gross fixed capital formation (percentage of GDP) of this economy is 41.89% in 2017.


Learn more about this topic:

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Gross Domestic Product: Items Excluded from National Production

from Economics 102: Macroeconomics

Chapter 4 / Lesson 4
314K

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