Archives Answers

False, The value of fixed assets decreases or depreciates with the passage or efflux of time, even if they are not being put to use in the business.

False, Intermediate goods are generally non-durable in nature. They are the goods used as raw material and they lose their identity in the production process for the creation of a new commodity, during an accounting year.

False, Only expected obsolescence is a component of depreciation. Explanation:- Depreciation refers to a fall in the value of fixed assets due to normal wear and tear, passage of time or expected obsolescence. Expected Obsolescence occurs due to change in…

False, It is a final good as it is purchased for investment purposes.

True, It will be included in National Income as it is a part of Factor Income from abroad.

False, Because all such purchases are not necessarily used up for further production or resold during the year. For example, products like machines, vehicles, etc. are final products even though they are purchased by a production unit from other production…

False, National Income can also be less than domestic income when net factor income from abroad is negative. National Income is always more than the Dometic Income only when net factor income from abroad is positive.

False, Only expected obsolescence is a component of depreciation. Any loss of value of fixed assets on account of any unexpected obsolescence is called Capital Loss and not depreciation.

False, Final goods include those goods which are either consumed by the households or purchased by the producers for investment purposes. Thus, if a firm purchased a good for investment purposes. It is also a final goods.

True, If the end-use of the good is for further production or resale, then the good is an intermediate good. However, if the end-use of the good is consumption or investment, then the good is a final good.