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

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

What is meant by individual capital?

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

  1. Owned by the society.

  2. Owned by one person.

  3. Owned by a group of people.

  4. Owned by the government.

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Correct Option: B
Explanation:

Individual capital refers to the capital owned by one person/individual. Summation of all the individual capital in an economy is termed as the national capital, which determines the status of an economy.

Capital is an indispensable factor of production.

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: B
Explanation:

Capital is an indispensable factor of production as it supervises other factors of production,Also it is the human capital which makes the profit possible.

What is remunerative capital?

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

  1. Capital provided to the government

  2. Capital provided to private companies

  3. Capital provided to workers in the form of wages

  4. Capital provided to the society

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Correct Option: C
Explanation:

Remunerative capital refers to the payment made to the workers for their contribution to production. It is a capital provided to workers in the form of wages. E.g. salaries, wages, allowance for food etc.

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