New addition to capital stock in an econ

CUET Preparation Today

Start Free Mocks

Home Questions 447FFQBM8C

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

New addition to capital stock in an economy is measured by net investment or new capital formation. Complete the formula.

Net Investment = Gross investment - ?

Options:

Change in stock

Depreciation

Net indirect taxes

Intermediate consumption

Correct Answer:

Depreciation

Explanation:

The correct answer is Option (2) → Depreciation

New addition to capital stock in an economy is measured by net investment or new capital formation, which is expressed as

Net Investment = Gross investment – Depreciation