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WAEC Economics 2008 Question 33

Question 33

National Income

Use the table below to answer the question.
Items | $ Million
Final consumption expenditure | 500
Gross private investment | 150
Government purchases | 300
Depreciation | 25
Net factor income | −10
The net capital formation is

  1. A.$115 m
  2. B.$125 m
  3. C.$915 m
  4. D.$925 m.
Show the answer and explanation

Answer: B ($125 m)

Explanation

Net capital formation = gross investment − depreciation = 150 − 25 = $125 m.