What can be linked with replacement investment?
Answer and explanation
Correct answer: Replacement of worn-out capital
Replacement investment is spending used to replace machines, equipment, buildings, or other fixed assets that have worn out or become obsolete. It compensates for depreciation and maintains existing productive capacity. Household consumption, exports, and tax collection are different economic activities. Gross investment may include both replacement spending and additional net investment.
Frequently asked questions
What is the correct answer to this question?
Replacement of worn-out capital
Why is this the correct answer?
Replacement investment is spending used to replace machines, equipment, buildings, or other fixed assets that have worn out or become obsolete. It compensates for depreciation and maintains existing productive capacity. Household consumption, exports, and tax collection are different economic activities. Gross investment may include both replacement spending and additional net investment.
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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