A measure of the degree to which capital wears out or becomes obsolete during a period is

Question

Quizplus · Accepted Answer

Depreciation is the measure of the degree to which capital wears out or becomes obsolete during a period. Net private domestic investment (A) is the net increase in the stock of capital during a period, while gross private domestic investment (B) is the total amount spent on capital during a period, including replacement of worn-out or obsolete capital. National income costs (C) refers to the expenses incurred by firms in producing goods and services, including wages and salaries paid to workers, payments to suppliers of raw materials, and interest paid on loans. None of these concepts directly measure capital depreciation.

A Measure of the Degree to Which Capital Wears Out