Write true or false with reason.
1) Gross investment may occur even when net investment is zero.
2)Net investment reduces unemployment.
3)Intermediates goods are durable - use producer goods.
4)Investory investment refers to change in stock,therefore a stock variable.
Dear student,
1. True- Net investment = Gross investment- Depreciation,
net investment is 0 when gross investment = depreciation, while when depreciation > gross investment, than net investment is negative. Hence gross investment may occur even when net investment is 0.
2.True- Net investment enhances the existing activities in an economy, which creates positive impact on employment. So, net investment reduces unemployment.
3.False- Intermediate goods or producer goods are those goods which are used as inputs in production of final goods. Intermediate goods can be both durable or non durable, for example- durable goods like- trucks, vehicle used by the government for military purpose are intermediate goods as they are used in producing defence services. On the other hand, non-durable goods like milk is used as an intermediate good in a dairy shop.
4.False- The difference between goods produced and goods sold in a given year is called inventory investment. It is a flow variable as it is measured during a period of time.
Regards
1. True- Net investment = Gross investment- Depreciation,
net investment is 0 when gross investment = depreciation, while when depreciation > gross investment, than net investment is negative. Hence gross investment may occur even when net investment is 0.
2.True- Net investment enhances the existing activities in an economy, which creates positive impact on employment. So, net investment reduces unemployment.
3.False- Intermediate goods or producer goods are those goods which are used as inputs in production of final goods. Intermediate goods can be both durable or non durable, for example- durable goods like- trucks, vehicle used by the government for military purpose are intermediate goods as they are used in producing defence services. On the other hand, non-durable goods like milk is used as an intermediate good in a dairy shop.
4.False- The difference between goods produced and goods sold in a given year is called inventory investment. It is a flow variable as it is measured during a period of time.
Regards