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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Choose the incorrect statement (s) from below.

Options:

Depreciation does not take into account unexpected or sudden destruction or disuse of capital

Net Investment = Gross investment + Depreciation

Both 1 and 2

None of the above

Correct Answer:

Net Investment = Gross investment + Depreciation

Explanation:

The correct answer is Option 2: Net Investment = Gross investment + Depreciation

Option 1: Depreciation does not take into account unexpected or sudden destruction or disuse of capital. It is correct. Depreciation does not take into account unexpected or sudden destruction or disuse of capital as can happen with accidents, natural calamities or other such extraneous circumstances.

Option 2: Net Investment = Gross investment +  Depreciation. This is incorrect. Net Investment = Gross investment – Depreciation

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