National accounts: Define Gross Domestic Capital Formation (GDCF). Full question: Which description best defines GDCF in the system of national accounts? Choose the correct option.
General Knowledge
Indian Economy
Difficulty: Medium
Choose an option
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AGross additions to fixed assets within the domestic territory plus change in inventories during the year
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BSum of all current consumption expenditures by households and government
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CNet exports of goods and services over the accounting year
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DOnly purchases of financial assets by residents and government
Answer
Correct Answer: Gross additions to fixed assets within the domestic territory plus change in inventories during the year
Explanation
Given data
- Term to define: Gross Domestic Capital Formation (GDCF).
Concept / Definition GDCF comprises (i) gross fixed capital formation (machinery, buildings, infrastructure, etc. before deducting depreciation), and (ii) change in stocks (inventories), all within the domestic territory during the accounting period.
Final Answer Gross additions to fixed assets within the domestic territory plus change in inventories during the year.