Macro

National Income

Medium

Any new addition to capital stock in an economy is measured by _________.

Gross investment

Net investment

Depreciation

Inventory investment

✅ Correct Option: 2

Option 1 -> Gross investment includes both new capital formation and replacement of depreciated capital, so it overstates the actual addition.

Option 2 -> Net investment is gross investment minus depreciation, representing the actual new addition to capital stock.

Option 3 -> Depreciation measures the reduction in capital stock value due to wear and tear, not addition.

Option 4 -> Inventory investment relates to changes in stock of goods, not capital stock addition.

Hence, Net investment -> Net investment = Gross investment - Depreciation. It represents the true net addition to the economy's capital stock after accounting for the wear and tear of existing capital. For example, if an economy invests $100 billion in new machinery (gross investment) but$ 30 billion worth of old machinery depreciates, the net addition to capital stock is only $70 billion (net investment). This is why net investment is the accurate measure of actual capital stock growth.-> correct

2025: 13 May Shift 2

The benefits (or harms) a firm or an individual causes to another for which they are not paid (or penalized) is referred to as .........

2025: 26 May Shift 2

The value of the nominal GNP of an economy was Rs 5000 crores in a particular year. The value of GNP of that country during the same year, evaluated at the prices of same base year, was Rs 6000 crores. What is the value of the GNP deflator of the year.

2025: 13 May Shift 1

To measure consumer price index (CPI) which of the following years are taken into consideration?

(A) Current Year.

(B) Preceeding Year.

(D) Succeeding Year.

Choose the correct answer from the options given below:

2026: 23 May Shift 1

Match the LIST-I with LIST-II

LIST-I		LIST-II
A. Final goods	I.	Variables defined over a period of time
B. Flow	II.	Tools, machinery used in the production of goods and services
C. Stock	III.	Goods are available for consumption
D. Capital goods	IV.	Variables defined at a point of time

Choose the correct answer from the options given below:

2022: 16 July Shift 2

Identify the correct statements from the following:

A. Fees to a mechanic paid by a firm is not included in the estimation of national income

B. Income tax paid by an individual is not included in national income

C. Interest paid by a garment manufacture on a loan taken from bank is included in national income

D. Payment of old age pension will not be included in national income as it is a transfer payment

E. Insurance premium paid by household to an insurance company is not included in the estimation of national income

Choose the correct answer from the options given below:

2026: 15 May Shift 1

Which of the following are the examples of Transfer Payments?

A. Expenditure on scholarships.

B. Expenditure on unemployment benefits.

C. Expenditure on subsidies.

D. Expenditure on imports.

Choose the correct answer from the options given below:

Any new addition to capital stock in an economy is measured by _________.

Solution

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