{"id":6716,"date":"2020-02-29T14:51:35","date_gmt":"2020-02-29T09:21:35","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=6716"},"modified":"2020-02-29T14:51:35","modified_gmt":"2020-02-29T09:21:35","slug":"%e2%96%bagross-fixed-capital-formation","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/%e2%96%bagross-fixed-capital-formation\/","title":{"rendered":"\u25baGROSS FIXED CAPITAL FORMATION"},"content":{"rendered":"<p><span style=\"color: #0000ff;\"><strong>Relevance: Prelims: Economy<\/strong><\/span><\/p>\n<p><a href=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2020\/02\/gross.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-6717\" src=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2020\/02\/gross.jpg\" alt=\"\" width=\"638\" height=\"479\" srcset=\"https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2020\/02\/gross.jpg 638w, https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2020\/02\/gross-150x113.jpg 150w, https:\/\/triumphias.com\/blog\/wp-content\/uploads\/2020\/02\/gross-300x225.jpg 300w\" sizes=\"auto, (max-width: 638px) 100vw, 638px\" \/><\/a><\/p>\n<p><span style=\"text-decoration: underline; color: #ff0000;\"><em><strong>What is Gross Fixed Capital formation?<\/strong><\/em><\/span><\/p>\n<ul>\n<li>It is essentially net investment.<\/li>\n<li>It is a component of the Expenditure method of calculating GDP.<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline; color: #ff0000;\"><em><strong>WHAT IT INCLUDES? <\/strong><\/em><\/span><\/p>\n<ul>\n<li>Land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; the construction of roads, railways, private residential dwellings, and commercial and industrial buildings.<\/li>\n<li>Disposal of fixed assets is taken away from the total.<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline; color: #ff0000;\"><em><strong>WHAT IT EXCLUDES? <\/strong><\/em><\/span><\/p>\n<ul>\n<li>Land Purchases<\/li>\n<li>Effects of depreciation (referred to as consumption of capital)<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline; color: #ff0000;\"><em><strong>MACROECONOMIC IMPACT<\/strong><\/em><\/span><\/p>\n<ul>\n<li>In macro theory, a rise in investment should contribute towards higher aggregate demand and also increase productive capacity.<\/li>\n<li>Increasing investment should lead to higher economic growth in the long-term though it depends on how effective the investment is.<\/li>\n<li><span style=\"color: #ff0000;\"><strong>Opportunity cost of investment:<\/strong><\/span> The opportunity cost of gross fixed capital investment is lower consumption \u2013 at least in the short-term. If more resources are spent on capital goods, it leads to decline in consumption of consumer goods.<\/li>\n<\/ul>\n<p><span style=\"color: #0000ff;\"><strong>For more such notes, Articles, News &amp; Views Join our Telegram Channel.<\/strong><\/span><\/p>\n<p><span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" title=\"Telegram Link\" href=\"https:\/\/t.me\/triumphias\" target=\"_blank\"><strong>https:\/\/t.me\/triumphias<\/strong><\/a><\/span><\/p>\n<p><span style=\"color: #0000ff;\"><strong>Click the link below to see the details about the UPSC \u2013Civils courses offered by Triumph IAS.<\/strong> <\/span><span style=\"color: #ff0000;\"><strong><a style=\"color: #ff0000;\" title=\"Courses available\" href=\"https:\/\/triumphias.com\/pages-all-courses.php\">https:\/\/triumphias.com\/pages-all-courses.php<\/a><\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Relevance: Prelims: Economy What is Gross Fixed Capital formation? It is essentially net investment. It is a component of the<\/p>\n","protected":false},"author":1,"featured_media":6714,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[42,43],"tags":[392],"class_list":["post-6716","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-studies-iii-technology-economic-development-bio-diversity-environment-security-and-disaster-management","category-indian-economy","tag-union-public-service-commission-upsc"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/6716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/comments?post=6716"}],"version-history":[{"count":1,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/6716\/revisions"}],"predecessor-version":[{"id":6718,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/6716\/revisions\/6718"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media\/6714"}],"wp:attachment":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media?parent=6716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/categories?post=6716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/tags?post=6716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}