Answer
Gross private domestic investment includes both the replacement investment which is the replacement of machinery, equipment and buildings that are used up and any net additions to the stock capital. Net private domestic investment only includes net additions to stock capital. Net private domestic investment would be a better approach because net domestic product will subtract the consumption of fixed capital, same as NPDI.
Work Step by Step
Gross private domestic investment includes both the replacement investment which is the replacement of machinery, equipment and buildings that are used up and any net additions to the stock capital. Net private domestic investment only includes net additions to stock capital. Net private domestic investment would be a better approach because net domestic product will subtract the consumption of fixed capital, same as NPDI.
