If capital stock is falling, which can be a possible reason?
Answer and explanation
Correct answer: सकल निवेश मूल्यह्रास से कम है
Capital stock changes according to net investment. If gross investment is less than depreciation, net investment is negative, so the economy replaces less capital than it loses through normal wear, obsolescence, or use. A positive net investment, or gross investment greater than depreciation, would increase the capital stock instead. Hence option A explains the decline.
Frequently asked questions
What is the correct answer to this question?
सकल निवेश मूल्यह्रास से कम है
Why is this the correct answer?
Capital stock changes according to net investment. If gross investment is less than depreciation, net investment is negative, so the economy replaces less capital than it loses through normal wear, obsolescence, or use. A positive net investment, or gross investment greater than depreciation, would increase the capital stock instead. Hence option A explains the decline.
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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