In National- Income Accounting, Replacement Investment Is the Investment That

question 49

Multiple Choice

In national- income accounting, replacement investment is the investment that

• A)is equal to all existing capital stock in the country.
• B)maintains the existing capital stock at a constant level.
• C)is used in the calculation of GDP from the expenditure side.
• D)when added to gross investment is equal to total saving.
• E)is done by the government.

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Definitions:

Plant Assets

Long-term tangible assets that are used in the operation of a business and are not intended for resale.

Depreciation Expense

Apportioning a physical asset’s cost over its estimated useful life.

Straight-Line Method

The straight-line method is a technique of allocating an asset's cost evenly throughout its useful life, commonly used for depreciation and amortization calculations.

Salvage Value

The approximated market price of an asset upon completing its useful life.