If gross investment is 0 and depreciation is 30 crore, what will be net investment and the capital signal?
Answer and explanation
Correct answer: Net investment negative 30 and capital may fall
Apply net investment = gross investment − depreciation. With gross investment of zero and depreciation of 30 crore, net investment = 0 − 30 = −30 crore. No new capital is added, while existing capital is being used up, so capital stock may decline. Net investment would be zero only if gross investment were 30 crore and fully replaced the depreciation.
Frequently asked questions
What is the correct answer to this question?
Net investment negative 30 and capital may fall
Why is this the correct answer?
Apply net investment = gross investment − depreciation. With gross investment of zero and depreciation of 30 crore, net investment = 0 − 30 = −30 crore. No new capital is added, while existing capital is being used up, so capital stock may decline. Net investment would be zero only if gross investment were 30 crore and fully replaced the depreciation.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
Student feedback
Was this question useful?
👍 0 Helpful 👎 0 Not helpful
Yes 0% No 0%
0 responsesStudent Reviews
No published reviews yet.
