Q17 of 30 Page 1

Depreciation of fixed capital assets refers to :(choose the correct alternative)

(a)Normal wear and tear


(b)Foreseen obsolescence


(c)Normal wear and tear and foreseen obsolescence


(d)Unforeseen obsolescence


Depreciation of fixed capital assets refers to (c) Normal wear and tear and foreseen obsolescence. Depreciation is the loss of value of fixed assets in use because of normal wear and tear, normal rate of accidental damages and expected or foreseen obsolescence. It is also known as consumption of fixed capital.


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15

Explain the implications of the following in a perfectly competitive market:

(a)Large number of buyers


(b)Freedom of entry and exit to firms


OR


Explain the implications of the following in an oligopoly market:


(a)Inter-dependence between firms


(b)Non-price competition


 16

Define stocks.

 18

What is revenue expenditure?

 19

Fiscal deficit equals : (choose the correct alternative)

(a)Interest payments


(b)Borrowings


(c)Interest payments less borrowing


(d)Borrowing less interest payments