Asked by Alexandre Al Mokhtari on Apr 24, 2024
Verified
Depreciation refers to:
A) the value of leisure goods.
B) changes in exchange rates.
C) income that we earn but do not receive.
D) investment undertaken merely to replace worn-out capital.
E) the effects of government subsidy programs.
Depreciation
The value of capital stock used up to produce GDP or that becomes obsolete during the year
Worn-Out Capital
Assets that have reached the end of their useful life in production processes, often leading to decreased efficiency and increased maintenance costs.
- Understand the concepts of depreciation and national income accounting, including Net Domestic Product (NDP).
Verified Answer
PP
pedro palacios7 days ago
Final Answer :
D
Explanation :
Depreciation is the decrease in the value of an asset over time due to wear and tear, obsolescence, or other factors. It is a cost incurred by businesses as they replace worn-out or outdated capital assets, such as machinery, equipment, buildings, and vehicles. Depreciation reflects the fact that these assets lose value over time and need to be replaced or upgraded to maintain production and efficiency.
Learning Objectives
- Understand the concepts of depreciation and national income accounting, including Net Domestic Product (NDP).