If a company installs a higher-capacity machine in place of an old machine, which part of the investment is treated as net investment?
Answer and explanation
Correct answer: अतिरिक्त क्षमता वाला भाग
Replacing the old machine maintains the existing capital stock and offsets depreciation. The part that provides capacity beyond the old machine adds to the stock of productive capital, so it is net investment. Depreciation is a loss in the value of existing capital, not itself an investment, and wages are payments to labour rather than additions to capital.
Frequently asked questions
What is the correct answer to this question?
अतिरिक्त क्षमता वाला भाग
Why is this the correct answer?
Replacing the old machine maintains the existing capital stock and offsets depreciation. The part that provides capacity beyond the old machine adds to the stock of productive capital, so it is net investment. Depreciation is a loss in the value of existing capital, not itself an investment, and wages are payments to labour rather than additions to capital.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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