Tag: capital

Questions Related to capital

If current consumption is reduced for the purpose of Capital Formation, that represents a _________________.

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

  1. Uneconomic activity

  2. Current sacrifice for future growth

  3. Decrease in demand

  4. Decrease in resources

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Correct Option: B

Larger production of ____________ goods would lead to higher production in future.

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

  1. consumer 

  2. capital 

  3. agricultural 

  4. public 

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Correct Option: B
Explanation:

An increase in the stock of capital goods, which are used for the production of consumer goods, will lead to increased production of consumer goods and enhance the future production output.

For the purpose of Capital Formation _____________________.

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

  1. Current consumption is to be sacrificed to a certain extent

  2. Current income should be saved

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: C

A 100% Consumption Economy ______________________.

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

  1. Cannot have any Capital Formation

  2. Will become static and cannot grow

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: C

Capital Formation is possible by _______________________.

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

  1. Using whole of the current capacity to produce only Consumer Goods

  2. Reducing present consumption to a certain extent

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: B

Capital Formation is required for _________________.

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

  1. Increasing the efficiency of production efforts

  2. Expansion of output of consumer goods in the future.

  3. Ensuring growth of the economy

  4. All the above

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Correct Option: D

Ability to Save depends upon _________________.

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

  1. Average level of income

  2. Distribution of national income.

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: C

For the purpose of Capital Formation, which of the following create "Savings" in an economy?

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

  1. Individuals or Households

  2. Business Enterprises

  3. Government

  4. All of the above

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Correct Option: D

Which of these is a source of savings for Government?

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

  1. Tax and Fees Collections

  2. Profits of PSUs

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: C

Capital Formation involves ___________________.

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

  1. Creation of Savings

  2. Mobilisation of Savings

  3. Investment of Savings into Real Capital

  4. All of the above

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Correct Option: D