Question : 31) In national-income accounting, “depreciation” refers to A) a term : 1384355

31) In national-income accounting, “depreciation” refers to

A) a term used in accounting, not economics.

B) the amount by which the capital stock is depleted during the accounting period.

C) net investment.

D) the increase in the economy’s stock of capital per year.

E) the decrease in the economy’s stock of capital per year.

32) In national-income accounting, a reduction of inventories counts as

A) consumption.

B) depreciation.

C) negative investment.

D) positive investment.

E) saving.

33) To calculate the change in the value of inventories for the investment component of GDP, one should use their

A) cost of production at the time they were produced.

B) cost of production minus the costs of labour and capital.

C) current market value.

D) market value at the time they were produced.

E) value at the time the goods are sold and removed from inventory.

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

A) is used in the calculation of GDP from the expenditure side.

B) maintains the existing capital stock at a constant level.

C) is equal to all existing capital stock in the country.

D) when added to gross investment is equal to total saving.

E) is done by the government.

35) In national-income accounting, the term “fixed investment” refers to

A) total gross investment minus depreciation.

B) the existing capital stock.

C) the creation of new plant and equipment.

D) investment in stocks and bonds.

E) capital stock that has been repaired.

36) Which of the following statements regarding investment is correct?

A) The capital stock includes investment in stocks and bonds.

B) The accumulation of inventories does not count as current investment.

C) Rental payments are included as investment expenditures.

D) Depreciation refers to funds used to increase the existing stock of capital.

E) Housing construction is classified as investment expenditure rather than consumption expenditure.

37) Which of the following statements about depreciation is correct?

A) Depreciation includes net additions to the economy’s total stock of capital.

B) The total amount of capital goods in a country is called depreciation.

C) Net investment is equal to gross investment minus depreciation.

D) Net investment is equal to gross investment plus depreciation.

E) Depreciation is equal to net investment.

38) When calculating GDP using the expenditure approach, the investment component includes

A) net investment only.

B) net investment minus depreciation.

C) gross investment plus depreciation.

D) net investment plus depreciation.

E) fixed investment minus depreciation.

39) Consider investment as a component of GDP. The change in the country’s capital stock during a year is equal to

A) gross investment.

B) capital consumption allowance.

C) net investment.

D) net change in inventories plus capital consumption allowance.

E) gross fixed investment.

40) Which of the following statements regarding housing expenditures in the national accounts is correct?

A) Owner-occupied housing is counted as investment by imputing the value of the housing services enjoyed by the owner.

B) Rental payments for houses are counted as part of consumption.

C) The provision of new public housing by the government is classified as private investment.

D) New residential construction is classified as consumption.

E) The cost of a home purchased from its previous occupant is part of investment.