If maintaining the capital stock is the goal, what should gross investment be at least?
Answer and explanation
Correct answer: मूल्यह्रास के बराबर
Maintaining the capital stock requires replacing the capital that wears out. Since net investment equals gross investment minus depreciation, net investment must be at least zero. The minimum condition is therefore gross investment equal to depreciation. Investment above depreciation expands the capital stock, whereas investment below depreciation causes the stock to decline.
Frequently asked questions
What is the correct answer to this question?
मूल्यह्रास के बराबर
Why is this the correct answer?
Maintaining the capital stock requires replacing the capital that wears out. Since net investment equals gross investment minus depreciation, net investment must be at least zero. The minimum condition is therefore gross investment equal to depreciation. Investment above depreciation expands the capital stock, whereas investment below depreciation causes the stock to decline.
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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