Assertion (A): Buying a second-hand machine from another firm is not investment for the economy.
Reason (R): The machine was counted when it was new; the sale only moves it from one owner to another.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

No new capital is added to the economy, so A is true.
R gives the reason: it was already counted when it was produced.

Concept: Second-hand capital
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsInvestment and depreciation

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Ten questions from Basic Concepts & the Circular Flow, at your own pace.

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Ten questions from Basic Concepts & the Circular Flow, at your own pace.

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Assertion (A): Buying a second-hand machine from another firm is not investment for the economy.Reason (R): The machine was counted when it was new; the sale only moves it from one owner to another.

Explanation

Assertion (A): Buying a second-hand machine from another firm is not investment for the economy.
Reason (R): The machine was counted when it was new; the sale only moves it from one owner to another.