The correct answer is Option (2) → Fixed investment.
Fixed investment refers to expenditure on the purchase of capital goods such as machinery, tools, buildings, and equipment. These are used in the production process over a long period and are not consumed within a single accounting year.
Let us review the other options:
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Inventory investment: Refers to changes in the stock of raw materials, finished goods, and work-in-progress, not fixed capital goods.
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Gross investment: Includes both fixed investment and inventory investment. It is a broader term but not as specific as fixed investment. On page 57, NCERT it says: "Change in inventory is called inventory investment. It can be negative as well as positive... Inventories are treated as capital. Addition to the stock of capital of a firm is known as investment. Therefore, change in the inventory of a firm is treated as investment. There can be three major categories of investment. First is the rise in the value of inventories of a firm over a year which is treated as investment expenditure undertaken by the firm. The second category of investment is the fixed business investment, which is defined as the addition to the machinery, factory buildings and equipment employed by the firms. The last category of investment is the residential investment, which refers to the addition of housing facilities."
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Gross domestic capital formation: This is a national income accounting term that includes gross investment (fixed + inventory) and is used at the economy-wide level, not for individual expenditure on capital goods. This is another term for Gross investment.
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