Tag: capital

Questions Related to capital

Plant and machinery are ________.

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

  1. producer's goods

  2. consumers goods

  3. distributors goods

  4. free goods

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Correct Option: A
Explanation:

Plant and machinery are Producers goods. Together with stocks and work in progress, these goods are collectively termed 'Capital'.

What does capital formation mean?

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

  1. The increase in the stock of real capital in a country

  2. The increase in the supply of money in a country

  3. The decrease in the supply of money in a country

  4. The improvement of technological factors

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Correct Option: A
Explanation:

Capital formation means the net accumulation of stock in a country during a particular accounting period.

The term capital in economics means ___________.

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

  1. factor of production

  2. investment in shares and debentures

  3. funds brought in by the entrepreneur

  4. an important city of the state

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Correct Option: A
Explanation:

Capital is used as a factor of production in economics as it helps in production process and helps to increase the productivity.

The cost of capital as a factor of production is expressed in the form of _______.

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

  1. interest

  2. dividend

  3. rent

  4. wages

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Correct Option: A
Explanation:

Interest is known as the cost of capital as a factor of production.For instance, when we keep a certain amount in bank,we get some extra money with the principle amount .This extra amount is known as interest.

In economics we call the buildings, machinery, other equipment used in production as _______.

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

  1. capital

  2. land

  3. money

  4. none of the above

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Correct Option: A
Explanation:

Buildings,machinery,other equipment used in production process -all are regarded as capital in economics as these are fixed assets and helps to increase productivity in an economy.

Which of these Industries falls in the category of capital goods industry?

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

  1. Mineral

  2. Coal

  3. Petroleum

  4. Machine

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Correct Option: D
Explanation:

Machines are the capital goods as machines are used in producing other goods ,rather than being bought by consumers.

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.