If gross investment is eighty and depreciation is thirty, what will net investment be?
Answer and explanation
Correct answer: Fifty
Net investment is calculated as gross investment minus depreciation. Therefore, 80 − 30 = 50. After replacing the capital consumed through depreciation, fifty units remain as the net addition to the capital stock, assuming both figures use the same period and unit. Adding the amounts or reporting gross investment alone would not answer the question.
Frequently asked questions
What is the correct answer to this question?
Fifty
Why is this the correct answer?
Net investment is calculated as gross investment minus depreciation. Therefore, 80 − 30 = 50. After replacing the capital consumed through depreciation, fifty units remain as the net addition to the capital stock, assuming both figures use the same period and unit. Adding the amounts or reporting gross investment alone would not answer the question.
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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