capital consumption


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capital consumption

the reduction in a country's CAPITAL STOCK incurred in producing this year's GROSS NATIONAL PRODUCT (GNP). In order to maintain (or increase) next year's GNP, a proportion of new INVESTMENT must be devoted to replacing worn-out and obsolete capital stock. Effectively, capital consumption represents the aggregate of firms’ DEPRECIATION charges for the year.
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Compare these capital consumption figures to those of such prominent U.
In economic accounts, depreciation, or capital consumption, is the quantity subtracted from gross domestic product to obtain net domestic product.
Internal sources of funds include profits after dividend payments, capital consumption allowances, foreign earnings (foreign branch profits, subsidiary profits retained abroad and remitted), and an inventory valuation adjustment plus a capital consumption adjustment to put profits on a current cost basis.
Since the conclusion of the 1981-82 recession, corporate after-tax profits, adjusted for inventory valuation and capital consumption, have grown slightly more than twofold to $195 billion.
National Income Without Capital Consumption Adjustment by

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