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Home Questions 8QBADG5Z8U
Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

 

Items

 In crores 

1

 Private final consumption expenditure 

397

2

 Exports

28

3

 Govt. Final consumption expenditure

919

4

 Gross fixed capital formation

764

5

 Opening stock

30

6

 Closing stock

35

7

 Consumption of fixed capital

100

8

 Imports

50

9

 Net factor income from abroad

(-)200

10

 Subsidies

40

 11 

 Indirect taxes

45

Choose the correct word for consumption of fixed capital.

Options:

Deflation

Devaluation

Depreciation

Deficit

Correct Answer:

Depreciation

Explanation:

Depreciation is also known as consumption of fixed capital. Since the capital which is used to carry out production undergoes wear and tear, the producer has to undertake replacement investments to keep the value of capital constant. The replacement investment is same as depreciation of capital.

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