Depreciation is all the following, except
A) the difference between GDP and NDP.
B) the difference between gross investment and net investment.
C) the accumulation of capital stock.
D) the consumption of ﬁxed capital.

Question

Quizplus · Accepted Answer

Depreciation refers to the consumption of fixed capital or the wear and tear on capital assets over time. It is represented by the difference between GDP and NDP (Gross Domestic Product and Net Domestic Product) and between gross investment and net investment. It does not represent the accumulation of capital stock; rather, it signifies the reduction in value of the capital stock due to its use and obsolescence.

Depreciation Is All the Following, Except