Tag: economy of a village

Questions Related to economy of a village

Which of these is not a stage of capital formation?

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

  1. Saving

  2. Mobilization of savings

  3. Investment

  4. Consumption

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Correct Option: D
Explanation:
The 3 stages of capital formation-
1)creation of savings
2)mobilization of savings
2)converting savings into investment
Thus,consumption is not included in capital formation process.

In economics, the term 'Capital' means -
I. Money introduced in business
II. Things like tools, machines and equipments.

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:

Money invested to run an organization and fixed assets like tools,machines,and equipment- both are termed as 'capital' in economics as both help the production process to improve.

Addition to the stock of capital goods in a country means _______.

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

  1. capital reduction

  2. investment

  3. capital formation

  4. both (b) & (c)

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Correct Option: D
Explanation:

Addition to the existing stock of capital leads to increase in investment and capital formation in an economy.

Social overhead capital mainly includes _______.

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

  1. transport, irrigation, energy, education

  2. health & medical facilities

  3. union of the above two sets

  4. capital employed in agricultural activities

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Correct Option: A
Explanation:

Social overhead capital includes all the 'basic' services required in the production process such as,transport,irrigation,energy,education,health and medical facilities.

Over the years the rate of gross capital formation has _______.

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

  1. increased

  2. decreased

  3. remained constant

  4. has not shown any specific trend.

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Correct Option: A
Explanation:

Over the years the rate of accumulation of net capital during a particualar accounting period has increased as the skill and knowledge of labour are increasing day by day ,which in turn is increasing the productive capacity of an economy.

A characteristic feature of capital is _____________.

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

  1. elasticity

  2. gift of nature

  3. mobility 

  4. All of the above

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Correct Option: C
Explanation:

Capital  as a factor of production,possess great mobility as it can be transferred from one place to another instantly.

In Economics, capital includes ______________.

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

  1. asset

  2. money

  3. entrepreneurship

  4. Both a & b

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Correct Option: D
Explanation:

Capital, as a factor of production, includes both assets like machines, equipment, etc and money-which are important to maintain the smooth functioning of the production process.

Which of these constitutes does not constitute "Capital'?

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

  1. Factory Building

  2. Plant and Machinery

  3. Forests

  4. Dams and Canals

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Correct Option: C

Which of these constitutes "Capital'?

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

  1. Land

  2. Water

  3. Air

  4. Plant and Machinery

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Correct Option: D

The number of units of capital required in order to produce one unit of output is termed as:

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

  1. Capital output ratio

  2. Input output ratio

  3. Investment ratio

  4. Capital input ratio

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Correct Option: A
Explanation:

Units of capital employed to produce a certain level of output divided by total units of output gives us the capital output ratio. It is measured in order to check the efficiency and effectiveness of an organization.