Which option gives the correct relation?
Answer and explanation
Correct answer: Gross investment is the sum of net investment and depreciation
The basic identity is net investment = gross investment − depreciation. Moving depreciation to the other side gives gross investment = net investment + depreciation, so B is correct. A reverses the subtraction. C is not always true because net investment can be zero or negative, and D is false because gross investment may be positive.
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What is the correct answer to this question?
Gross investment is the sum of net investment and depreciation
Why is this the correct answer?
The basic identity is net investment = gross investment − depreciation. Moving depreciation to the other side gives gross investment = net investment + depreciation, so B is correct. A reverses the subtraction. C is not always true because net investment can be zero or negative, and D is false because gross investment may be positive.
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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