Tag: economy of a village

Questions Related to economy of a village

The __________ capital helps a labourer to produce goods.

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

  1. collective capital

  2. individual capital

  3. auxiliary capital

  4. concrete capital

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Correct Option: C
Explanation:


Auxiliary means to help or helping hence auxiliary capital helps laborers produce goods. 

Give an example of a sunk capital.

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

  1. A textile weaving machine

  2. Photographic films

  3. Railways

  4. Wool

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Correct Option: A

Capital ____________ over a period of time. 

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

  1. appreciates

  2. depreciates

  3. compensates

  4. demonstrates

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Correct Option: B

Circulating capital is directly absorbed into the finished products.

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

  1. True

  2. False

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Correct Option: A
Explanation:

Capital gets circulated and all results into the finished products as capital holds enough significance in the functional relationship between inputs and outputs produced in an economy during a given period of time.

Amongst all the factors of production, _________ has the highest mobility.

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

  1. land

  2. labour

  3. capital

  4. entrepreneurship

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Correct Option: B
Explanation:

LAbour has the highest mobility, hence migrating from one place to another is very common.

The functions of capital include provision for subsistence, provision for appliances, _______.

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

  1. provision for raw material

  2. provision for marketing and sales promotion

  3. economic development

  4. all the above

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Correct Option: D
Explanation:

Capital has a large set of effects and is generally used for multiple purposes. 

Those producer goods having a long life which can be used again and again in production processes are called ___________.

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

  1. trade capital

  2. fixed capital

  3. social capital

  4. human capital

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Correct Option: B

The saving by individuals depends more or less upon ___________.

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

  1. ability (or power) to save

  2. willingness (or desire) to save

  3. opportunity to save

  4. all the above

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Correct Option: D

The rate of capital formation is the ratio between the gross capital formation and gross domestic product at current prices.

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

  1. True

  2. False

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Correct Option: A
Explanation:

The rate of capital formation is the ratio between (the increase in fixed capital and inventories) and (the total value of good produced and services provided in a country during one year).

An increase in income tax adversely affects the willingness to save.

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

  1. True

  2. False

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Correct Option: A
Explanation:

This statement is true as persons feel demotivated to work hard in order to earn more as because the real income after paying the increased income tax is much less despite the hard work of the individuals .Therefore the willingness to save is also less as the willingness to earn more is less.