Question

Net capital formation cause due to ​

Answer 1

Answer:

Net Domestic Capital Formation (NDCF):

Depreciation refers to obsolescence and damage to fixed capital due to wear and tear. Thus, net capital formation is the addition to fixed capital and producers' stock of working capital.

Explanation:

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Answer 2

Answer:

Any non-financial asset used in the production of goods or services. Capital does not include financial assets such as bonds and stocks. Net Capital Formation makes allowance for depreciation of the existing capital stock due to wear and tear, obsolescence, etc.

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