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Class 11EconomicsNational Income and Related AggregatesEasyLevel 1
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If gross investment is ₹250 crore and net investment is negative ₹50 crore, what is depreciation?

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Answer and explanation

Correct answer: ₹300 crore

Apply NI = GI − D. Substitution gives −50 = 250 − D, so D = 250 + 50 = ₹300 crore. Depreciation exceeds gross investment by ₹50 crore, meaning replacement is incomplete and the capital stock falls by ₹50 crore. An answer of ₹200 crore would instead produce positive net investment, so it cannot be correct.

Related tags

NumericalDepreciationNegative-Net-InvestmentNational Income And Related AggregatesEconomicsClass 11 Mcq

Frequently asked questions

What is the correct answer to this question?

₹300 crore

Why is this the correct answer?

Apply NI = GI − D. Substitution gives −50 = 250 − D, so D = 250 + 50 = ₹300 crore. Depreciation exceeds gross investment by ₹50 crore, meaning replacement is incomplete and the capital stock falls by ₹50 crore. An answer of ₹200 crore would instead produce positive net investment, so it cannot be correct.

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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10 more MCQs
  1. 1Measurement of economic growth in macroeconomics is generally linked with which of the following?
  2. 2What is a possible limitation of per capita income as an indicator of economic welfare?
  3. 3Why is the idea of income distribution linked with national income in macroeconomics?
  4. 4If the government wants to increase aggregate demand by reducing taxes, which macroeconomic idea is involved?
  5. 5If inflation and unemployment both rise, why is this a complex situation in macroeconomic study?
  6. 6Why are income, output and expenditure studied together in national income accounting?
  7. 7If aggregate demand rises but the economy is at full capacity, why may pressure come on prices?
  8. 8If total output is constant but the population is rising, what may macroeconomic analysis focus on?
  9. 9If total output rises but environmental damage also rises, which limitation of a macroeconomic measure is shown?
  10. 10What can be a limitation of national income data in macroeconomics?
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