The consumption of ﬁxed capital in each year's production is called
A) indirect business taxes.
B) inventory reduction.
C) depreciation.
D) net investment.

Question

Quizplus · Accepted Answer

The consumption of fixed capital is referred to as depreciation, which is the reduction in the value of a fixed asset over time due to wear and tear, obsolescence or any other causal factor. Therefore, the correct answer is C. Indirect business taxes refer to taxes on the production, sale or use of goods and services. Inventory reduction refers to a decrease in the amount of goods held in inventory by a company. Net investment refers to the total amount of investment made in an economy, which includes both new investment and replacement investment.

The Consumption of ﬁXed Capital in Each Year's Production Is