If gross investment is one hundred twenty and depreciation is fifty, what will net investment be?
Answer and explanation
Correct answer: Seventy
Calculate net investment by subtracting depreciation from gross investment: 120 − 50 = 70. The positive result means that, after replacing capital consumed during the period, seventy units remain as a net addition to the capital stock. Adding the values gives 170, not net investment; choosing 50 or zero also ignores the formula.
Frequently asked questions
What is the correct answer to this question?
Seventy
Why is this the correct answer?
Calculate net investment by subtracting depreciation from gross investment: 120 − 50 = 70. The positive result means that, after replacing capital consumed during the period, seventy units remain as a net addition to the capital stock. Adding the values gives 170, not net investment; choosing 50 or zero also ignores the formula.
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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