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SubjectsEconomics
सकल निवेश और मूल्यह्रास
In Class 12 Economics, this topic explains gross investment and depreciation within the chapter “National Income and Related Aggregates.” Students learn that gross investment includes spending on new capital goods as well as replacement of worn-out assets, while depreciation measures the loss in value of fixed capital through wear, tear and obsolescence. The topic clarifies the relationship between gross and net investment: Net Investment = Gross Investment − Depreciation. It also shows why depreciation is deducted when converting gross national income or domestic product measures into their net equivalents.
TOPIC PRACTICE
Up to 2 questions from this page. Select your focus, then start.
Gross investment is the total investment in capital goods during a period. It includes investment that replaces depreciated capital as well as investment that adds to the capital stock. Net investment is obtained only after subtracting depreciation. Therefore, A correctly describes gross investment, while D describes net investment.
Net investment is calculated as gross investment minus depreciation. It therefore shows the actual increase or decrease in the economy’s capital stock after worn-out capital is accounted for. A positive value means expansion, zero means maintenance only, and a negative value means the capital stock has declined. Hence A is correct.
QUIZ COMPLETE
