If GDP is 1800, NDP is 1600, and net investment is 450, what will be the gross investment?
Answer and explanation
Correct answer: 650
The difference between GDP and NDP equals depreciation. Depreciation = GDP − NDP = 1800 − 1600 = 200. Gross investment includes net investment plus depreciation, so Gross investment = 450 + 200 = 650. Hence option C is correct. The values 450 and 200 separately represent net investment and depreciation, not gross investment.
Frequently asked questions
What is the correct answer to this question?
650
Why is this the correct answer?
The difference between GDP and NDP equals depreciation. Depreciation = GDP − NDP = 1800 − 1600 = 200. Gross investment includes net investment plus depreciation, so Gross investment = 450 + 200 = 650. Hence option C is correct. The values 450 and 200 separately represent net investment and depreciation, not gross investment.
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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