Tag: capital

Questions Related to capital

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.

Which of the following is an example of working capital?

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

  1. Tools

  2. Machine

  3. Building

  4. Raw Materials

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Correct Option: D
Explanation:

Raw materials and money in hand are called working capital. Unlike tools, machines and buildings, these are used up in production. 

One component of fixed capital is ______.

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

  1. cash

  2. stock

  3. labour

  4. building

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Correct Option: D
Explanation:

Fixed capital is a one-time investment made at the early stages of a business. The fixed capital investment is made to cater the long term needs of a business. 

Raw materials and money in hand are called _____.

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

  1. Fixed capital

  2. Every thing

  3. Working capital

  4. Human capital

  5. None of these

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Correct Option: C
Explanation:

Raw materials and money in hand are called working capital.

Working capital is the capital required by a business on a day to day basis. 

Fixed capital stands for ______.

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

  1. money with the proprietor

  2. tools, machines, buildings etc. which can be used in production over many years

  3. money deposited in the bank

  4. total share of capital

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Correct Option: B
Explanation:

Fixed capital refers to investment in long-term assets. Management of fixed capital involves the allocation of the firm’s capital to different projects or assets with long-term implications for the business. For example, tools, machines, buildings, etc. which can be used in production over many years.