General Knowledge - Indian Economy - Discussion

Discussion :: Indian Economy - Indian Economy (Q.No.16)

16. 

Gross domestic capital formation is defined as

[A]. flow of expenditure devoted to increased or maintaining of the capital stock
[B]. expenditure incurred on physical assets only
[C]. production exceeding demand
[D]. net addition to stock after depreciation

Answer: Option D

Explanation:

No answer description available for this question.

Manish said: (Aug 20, 2011)  
Gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets during a given period plus certain additions to the value of non-produced assets realised by the productive activity of producer or institutional units. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year.

Manali said: (Jul 16, 2013)  
GFCF is called "gross" because the measure does not make any adjustments to deduct the consumption of fixed capital (depreciation of fixed assets) from the investment figures. For the analysis of the development of the productive capital stock, it is important to measure the value of the acquisitions less disposals of fixed assets beyond replacement for obsolescence of existing assets due to normal wear and tear. "Net fixed investment" includes the depreciation of existing assets from the figures for new fixed investment, and is called net fixed capital formation.

Dhananjay said: (Sep 21, 2013)  
Hey when we use the word "gross". In that both expenditure and income comes na ?

Anshu said: (Jun 7, 2014)  
Yes, In gross word all the indirect expenses and income are involved.

Shadman said: (Apr 18, 2015)  
Gross-Depreciation=Net.

Mahendra Khatarkar said: (Jun 16, 2015)  
In gross assets include all annual income.

Sonam said: (Jul 31, 2015)  
I believe the answer given is wrong as gross figure includes depreciation amount as well and that amount is deducted to reach to net figure.

Sonam said: (Jul 31, 2015)  
I believe the answer given is wrong as gross figure includes depreciation amount as well and that amount is deducted to reach to net figure.

Sreya said: (Aug 2, 2015)  
Can anyone explain? please.

Roshni Shewaramani said: (Oct 10, 2015)  
It's wrong! Net addition to stock after depreciation is called net capital formation. Gross capital formation does not make an allowance for depreciation.

Rahul Gupta said: (Jun 17, 2016)  
It's wrong Answer.

Right answer could be A.

Albin said: (Sep 4, 2016)  
I think the right answer is A.

Dr.Nidhi said: (Nov 28, 2016)  
A is 100% right answer.

Brock said: (May 30, 2018)  
The answer D is applicable for net domestic capital formation [NDCF] not for GDCF because;

GDCF - Dep. = NDCF.

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