Which condition is correct for net investment to be positive?
Answer and explanation
Correct answer: Gross investment is greater than depreciation
From net investment = gross investment − depreciation, the result is positive only when gross investment is larger than depreciation. Equality produces zero net investment. If depreciation is larger, or if gross investment is zero while depreciation is positive, the result is negative. Therefore B is the necessary condition among the given options.
Frequently asked questions
What is the correct answer to this question?
Gross investment is greater than depreciation
Why is this the correct answer?
From net investment = gross investment − depreciation, the result is positive only when gross investment is larger than depreciation. Equality produces zero net investment. If depreciation is larger, or if gross investment is zero while depreciation is positive, the result is negative. Therefore B is the necessary condition among the given options.
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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