Tag: concept of consumption function, saving function and investment function

Questions Related to concept of consumption function, saving function and investment function

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. 

What are 'raw materials and money in hand' called?

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

  1. Working capital

  2. Fixed capital

  3. Physical capital

  4. Human capital

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Correct Option: A
Explanation:

Working capital  is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital equals to current assets. Working capital is calculated as current assets minus current liabilities. If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit.

Those hidden qualities in a person which earn him an income and cannot be transferred from one place to another 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. social capital

  3. human or personal capital

  4. fixed capital

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Correct Option: C
Explanation:

Human capital belongs to that person itself, it cannot be delegated or transferred from one person to another. It is an individual's effort and potential talent coinciding with the availability of proper opportunity which helps them to earn income.

Capital includes all those goods (items or commodities) which are used for further production of more goods, e.g. _______________.

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

  1. machines and tools

  2. factory buildings

  3. transport equipments

  4. all the above

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Correct Option: D
Explanation:

Capital goods are generally a long term investment as it is used to produce many different products.