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In the context of the Indian economy, which of the following is not a part of Gross Capital Formation?
- a)Software production for banking systems
- b)Installation of wind energy systems
- c)Construction of buildings
- d)Durable goods in the hands of the households
Correct answer is option 'D'. Can you explain this answer?
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In the context of the Indian economy, which of the following is not a...
Explanation:
Definition of Gross Capital Formation:
Gross Capital Formation (GCF) refers to the total value of acquisitions of fixed assets, such as land, machinery, buildings, and other assets that provide a future service. It is a key indicator of the investment climate in an economy.
Components of Gross Capital Formation:
1. Software production for banking systems: Software production for banking systems involves the creation of intangible assets that contribute to the efficiency and modernization of the banking sector. This falls under GCF as an investment in technology.
2. Installation of wind energy systems: The installation of wind energy systems involves the acquisition of fixed assets that generate renewable energy. This is considered a part of GCF as it represents investment in infrastructure for sustainable development.
3. Construction of buildings: Construction of buildings involves the creation of physical infrastructure that provides housing, commercial space, or industrial facilities. This is a significant component of GCF as it contributes to the overall investment in the economy.
Not a part of Gross Capital Formation:
- Durable goods in the hands of the households: Durable goods in the hands of households, such as appliances, furniture, and electronics, are already produced assets that are not considered part of GCF. GCF focuses on new investments in fixed assets that add to the capital stock of the economy.
In conclusion, durable goods held by households do not fall under the category of Gross Capital Formation as they are not new investments in fixed assets.
Definition of Gross Capital Formation:
Gross Capital Formation (GCF) refers to the total value of acquisitions of fixed assets, such as land, machinery, buildings, and other assets that provide a future service. It is a key indicator of the investment climate in an economy.
Components of Gross Capital Formation:
1. Software production for banking systems: Software production for banking systems involves the creation of intangible assets that contribute to the efficiency and modernization of the banking sector. This falls under GCF as an investment in technology.
2. Installation of wind energy systems: The installation of wind energy systems involves the acquisition of fixed assets that generate renewable energy. This is considered a part of GCF as it represents investment in infrastructure for sustainable development.
3. Construction of buildings: Construction of buildings involves the creation of physical infrastructure that provides housing, commercial space, or industrial facilities. This is a significant component of GCF as it contributes to the overall investment in the economy.
Not a part of Gross Capital Formation:
- Durable goods in the hands of the households: Durable goods in the hands of households, such as appliances, furniture, and electronics, are already produced assets that are not considered part of GCF. GCF focuses on new investments in fixed assets that add to the capital stock of the economy.
In conclusion, durable goods held by households do not fall under the category of Gross Capital Formation as they are not new investments in fixed assets.
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In the context of the Indian economy, which of the following is not a part of Gross Capital Formation?a)Software production for banking systemsb)Installation of wind energy systemsc)Construction of buildingsd)Durable goods in the hands of the householdsCorrect answer is option 'D'. Can you explain this answer?
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In the context of the Indian economy, which of the following is not a part of Gross Capital Formation?a)Software production for banking systemsb)Installation of wind energy systemsc)Construction of buildingsd)Durable goods in the hands of the householdsCorrect answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about In the context of the Indian economy, which of the following is not a part of Gross Capital Formation?a)Software production for banking systemsb)Installation of wind energy systemsc)Construction of buildingsd)Durable goods in the hands of the householdsCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the context of the Indian economy, which of the following is not a part of Gross Capital Formation?a)Software production for banking systemsb)Installation of wind energy systemsc)Construction of buildingsd)Durable goods in the hands of the householdsCorrect answer is option 'D'. Can you explain this answer?.
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