Question 1
Depreciation is
◦ the sum of gross and net investment.
◦ new additions to a firm's stock of intangible capital.
◦ the decline in the economic value of an asset over time.
◦ the decrease in the general price level.
Question 2
Which of the following would constitute
depreciation, as economists use the term?
◦ using some of your savings to buy a car
◦ a GM shareholder selling some of her stock
◦ inventories of firms decreasing due to an increase in sales
◦ All new software requires Windows 8, and not Windows 7, as an operating system.