If depreciation is underestimated, what will be the effect on measured net investment?
Answer and explanation
Correct answer: शुद्ध निवेश अधिक दिखाई दे सकता है
Net investment is obtained by subtracting depreciation from gross investment. If depreciation is recorded below its actual amount, too little is subtracted, so measured net investment is overstated and may appear higher than it really is. This error does not eliminate gross investment, force net investment to zero, or guarantee that the capital-stock estimate remains accurate.
Frequently asked questions
What is the correct answer to this question?
शुद्ध निवेश अधिक दिखाई दे सकता है
Why is this the correct answer?
Net investment is obtained by subtracting depreciation from gross investment. If depreciation is recorded below its actual amount, too little is subtracted, so measured net investment is overstated and may appear higher than it really is. This error does not eliminate gross investment, force net investment to zero, or guarantee that the capital-stock estimate remains accurate.
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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