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Defining GDP

The Gross fix...

Question

The Gross fixed capital formation is a determinant of ________ in the economy.

A

Trade

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B

Investment

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Solution

The correct option is B Investment
Gross Fixed Capital Formation (GFCF) refers to the net increase in physical assets (investment minus disposals). It does not account for the consumption (depreciation) of fixed capital.

It is a component of expenditure approach to calculating Gross Domestic Product (GDP).

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