Question : Which of the following is not a component of investment?
Option 1: In addition to residential construction
Option 2: Money spent on purchasing shares of a company
Option 3: Machinery and equipment employed by a firm
Option 4: Inventories of raw materials stocked by a firm
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Correct Answer: Money spent on purchasing shares of a company
Solution : The correct option is Money spent on purchasing shares of a company.
Money spent on purchasing shares of a company is not considered a component of investment in the traditional sense. While buying shares is a financial transaction, it is often categorized under "financial assets" rather than the classic definition of investment, which usually refers to spending on physical assets like machinery, real estate, or infrastructure that contribute to economic development and growth. In addition to residential construction, machinery and equipment employed by a firm and inventories of raw materials stocked by a firm are components of investment.
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Question : Which among the following is the correct way to express the change of inventories of a firm during a year?
Option 1: Change of inventories of a firm during a year (value added - intermediate goods used by the firm + sale of the firm during a year)
Option 2: Change of inventories of a firm during a year (value added + intermediate goods used by the firm + sale of the firm during a year)
Option 3: Change of inventories of a firm during a year (value added - intermediate goods used by the firm - sale of the firm during a year)
Option 4: Change of inventories of a firm during a year (value added + intermediate goods used by the firm - sale of the firm during a year)
Question : The following bar graph shows the amount (in lakh Rs.) invested by a company in purchasing raw materials over the years 2015 to 2019. By how much percent did the company increase its investment in raw materials in 2019, as compared to 2015?
Option 1: 20%
Option 2: 33.33%
Option 3: 66.66%
Option 4: 11.66%
Question : Which of the following is a correct expression?
Option 1: Depreciation = Net investment - Gross investment
Option 2: Gross investment = Net investment - Depreciation
Option 3: Net investment = Gross investment - Depreciation
Option 4: Net investment = Gross investment + Depreciation
Question : The value added of a firm is calculated as___________.
Option 1: value of production of the firm - value of intermediate goods used by the firm.
Option 2: value of production of the firm + value of capital goods used by the firm.
Option 3: value of production of the firm / value of intermediate goods used by the firm.
Option 4: value of production of the firm + value of intermediate goods used by the firm.
Question : The following represent the opportunity cost of holding money, except:
Option 1: Loss of utility from goods that could have been purchased with the same amount of money
Option 2: Loss of interest-earning on cash holdings
Option 3: Loss of purchasing power of money due to inflation
Option 4: Transaction cost in withdrawing money
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