Tag: economy of a village

Questions Related to economy of a village

In the short run which of the following is fixed?

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. Labor

  2. Capital

  3. Raw material

  4. None of the above

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Correct Option: B
Explanation:

In short run period(which generally means period within 1 year)capital remains fixed as capital formation needs high investment and moreover in short run even when the output is zero some fixed cost is incurred by the firm due to capital .

Labour intensive technique would get chosen in a _______.

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. Labour surplus economy

  2. Capital surplus economy

  3. Developed economy

  4. Developing economy

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Correct Option: A
Explanation:

The economy has to decide about technique of production on the basis of cost of labour and capital. A labour surplus economy choose labour intensive techniques and a capital surplus economy choose capital - intensive technique.

Find the odd option out.

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. Capital is man-made

  2. All capital is wealth

  3. Capital is durable

  4. Mobilisation of savings

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Correct Option: D
Explanation:

Capital is that wealth which is used in the production of goods and services in an economy: capital and human resource have an integrated  relationship:capital has to withstand wear ,pressure, damage etc.MOBILISATION OF SAVINGS is the odd one as it is not a feature of capital

Capital that can be used for several purposes or by several industries is ___________.

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. working capital

  2. social capital

  3. floating capital

  4. human capital

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Correct Option: C
Explanation:

Floating capital can be used for many purposes or by several industries. It is a part of capital that is invested in current assets of the organization, like raw materials.

Leather in a shoe factory is _______.

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. fixed capital

  2. sunk capital

  3. floating capital

  4. circulating capital

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Correct Option: C
Explanation:

Floating capital refers to the raw material part of the capital also known as working capital which can be used in many ways in the factory. Therefore, leather in a shoe factory is a floating capital.

Machines and tools are included in ________.

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. circulating capital

  2. fixed capital

  3. floating capital

  4. sunk capital

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Correct Option: B
Explanation:

Machines and tools are fixed capital  they are fixed assets(assets which are purchased for long term use and are not likely to be converted quickly into cash)

Consider the following groups of items:
(i)Factory buildings
(ii)Plant and Machinery
(iii) Stocks of raw materials
(iv)Wage bills
Which of these are known as working capital?

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. i and ii

  2. iii and iv

  3. i, ii and iii

  4. ii, iii and iv

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Correct Option: B
Explanation:

Working capital refers to those goods which are used to run the day-to-day activities in an organization. Thus stocks of raw materials and wage bills comprise the working capital.

In economics, the term 'capital' means-
I. Money introduced in business.
II. Things like tools, machines & equipment.
Select the correct answer from the options given below-

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. I only

  2. II only

  3. Both I and II

  4. None of the above

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Correct Option: C
Explanation:

Capital is the overall investment that is done in the business which is used either in the form of money or converted into assets, like tools, machines and equipment which are used productively to yield output.

What does venture capital mean?

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. A short-term capital provided to industries

  2. A long-term start-up capital provided to new entrepreneurs

  3. Funds provided to industries at times of incurring losses

  4. Funds provided for replacement and renovation of industries

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Correct Option: B
Explanation:

Entrepreneurs with ideas but lacking capital seek funds through the 'venture capital funds', In the RBI's classification such funds fall under Alternative Investment Funds (AIFs).

Which of the following statements is correct?

economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

  1. Robbins defined economics in the form of welfare economics.

  2. The law of demand is always true.

  3. All capital is wealth, but all wealth is not capital.

  4. None of the above.

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Correct Option: C
Explanation:

Capital is a part of wealth which can be utilized for supplementary production of wealth. Hence, all money/wealth is not said to be capital, but only that which is engrossed in generation of more income.
Law of demand has certain exceptions. While, Robbins defined economics under the scarcity approach.