Question

Briefly explain any one component of Gross Investments.

Hint:

Pick one panel of the picture, name its component and explain it in two lines. Gross Public Investment means government spending on roads, flyovers and dams.

Answer 1

Step 1: Read what the question asks:
Gross investment means the addition to the capital stock of the economy, including the replacement of capital that wears out.
The picture in the paper shows three panels (A, B and C), and each panel stands for one component of gross investment.
We have to pick any one component and explain it briefly. The question carries 2 marks, so a clear meaning and one or two supporting facts are needed.

Step 2: Choose the component:
Panel A shows a crane building a flyover or bridge. This is public construction work done by the government.
So the component chosen here is Gross Public Investment.

Step 3: Explain Gross Public Investment:
Gross Public Investment is the spending of the government on creating fixed assets such as roads, flyovers, bridges, dams and public buildings.
It is called gross because the figure also includes the money spent on replacing old public assets that have worn out.
These assets add to the capital stock of the country and raise its capacity to produce in the coming years.

Step 4: Marks check:
The official scheme gives marks for explaining any valid component shown in the picture, so one well explained component earns the full 2 marks.

Final Answer:
Gross Public Investment is the expenditure of the government on creating fixed assets such as flyovers, roads and dams, and it includes replacement of worn out assets.
\[ \boxed{\text{Gross Public Investment = government spending on fixed assets such as roads, flyovers and dams}} \]