GK
INDIAN ECONOMY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Gross domestic capital formation is defined as
|
|
flow of expenditure devoted to increased or maintaining of the capital stock
|
|
|
expenditure incurred on physical assets only
|
|
|
production exceeding demand
|
|
|
net addition to stock after depreciation
|
Explanation:
Detailed explanation-1: -The correct answer is Net investment = Gross investment-depreciation. The addition to the capital stock in an economy is measured by net investment or new capital formation, which is expressed as Net investment = Gross investment-depreciation.
Detailed explanation-2: -(If net domestic fixed capital formation is given, then depreciation would be added to make it gross.
Detailed explanation-3: -Gross Fixed Capital formation is included in the expenditure approach to national income accounting. Gross fixed capital investment means it doesn’t take into account the consumption of fixed capital. i.e. it ignores the effect of depreciation (e.g. a machine wearing out).
There is 1 question to complete.