Assertion (A): Net product is a better measure of what an economy can consume without running down its capital.
Reason (R): Net product subtracts the capital used up in producing the year's output.

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

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CorrectNot quiteAnswer A

Correct answer: A

Part of gross output must replace worn-out machines if capital is to stay intact.
R explains why net product is the sustainable amount.

Concept: Why net matters
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsGross and net

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Assertion (A): Net product is a better measure of what an economy can consume without running down its capital.Reason (R): Net product subtracts the capital used up in producing the year's output.

Explanation

Assertion (A): Net product is a better measure of what an economy can consume without running down its capital.
Reason (R): Net product subtracts the capital used up in producing the year's output.