If a machine becomes less valuable because of technological obsolescence while it is still usable, what can this be associated with?
Answer and explanation
Correct answer: Depreciation
Depreciation is not limited to visible physical wear. A capital good may lose economic value because newer technology makes it less efficient, less competitive, or outdated, even though it can still operate. This decline in value is technological or economic obsolescence and is included within the broader concept of depreciation or consumption of fixed capital.
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What is the correct answer to this question?
Depreciation
Why is this the correct answer?
Depreciation is not limited to visible physical wear. A capital good may lose economic value because newer technology makes it less efficient, less competitive, or outdated, even though it can still operate. This decline in value is technological or economic obsolescence and is included within the broader concept of depreciation or consumption of fixed 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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