In which situation will net investment equal the whole of gross investment?
Answer and explanation
Correct answer: When depreciation is zero
The accounting relationship is net investment = gross investment − depreciation. If depreciation is zero, nothing is deducted, so net investment remains exactly equal to gross investment. If depreciation equals gross investment, net investment becomes zero; if it is larger, net investment would be negative. Hence option A is the only correct condition.
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What is the correct answer to this question?
When depreciation is zero
Why is this the correct answer?
The accounting relationship is net investment = gross investment − depreciation. If depreciation is zero, nothing is deducted, so net investment remains exactly equal to gross investment. If depreciation equals gross investment, net investment becomes zero; if it is larger, net investment would be negative. Hence option A is the only correct condition.
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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