Q. Consider the following statements regarding Gross Fixed Capital Formation (GFCF):
1. GFCF includes both public and private investments.
2. GFCF calculates the total investments in the country after adjusting for depreciation.
Select the correct answer using the codes given below
Answer: A
Notes:
Statement 1 is correct. Gross fixed capital formation (GFCF) refer to both private and public investments in infrastructure.
Statement 2 is incorrect. GFCF is not a measure of total investment, because only the value of net additions to fixed assets is measured, and all kinds of financial assets are excluded, as well as stocks of inventories and other operating costs.
