In which option is a real increase in capital stock shown?
Answer and explanation
Correct answer: Gross investment 110 and depreciation 60
A real increase in capital stock requires positive net investment, calculated as gross investment minus depreciation. Option C gives 110 − 60 = 50, a positive amount. Option B only replaces depreciation because both values are equal. Options A and D give negative net investment because depreciation exceeds gross investment, so their capital stock may decline.
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What is the correct answer to this question?
Gross investment 110 and depreciation 60
Why is this the correct answer?
A real increase in capital stock requires positive net investment, calculated as gross investment minus depreciation. Option C gives 110 − 60 = 50, a positive amount. Option B only replaces depreciation because both values are equal. Options A and D give negative net investment because depreciation exceeds gross investment, so their capital stock may 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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