Tag: economy of a village

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Questions Related to economy of a village

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

Capital helps in increasing production and productivity.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Capital helps to improve the production,that is ,the action of transforming things from raw materials to finished products.It also helps in increasing the productivity,that is,the ability to produce things in a more efficient and effective manner.

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

Capital helps in maintaining defence of the country.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Several arms and ammunition is necessary to maintain the defence of the country, which is made with the help of capital such as machines, tools etc.Thus capital helps in maintaining the defence of the country.

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

Lower __________ leads to low savings which lead to a lower rate of capital formation.

  1. per capita income

  2. gross domestic product

  3. development plan

  4. economic instability
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Low per capita income limits the ability of individuals to save, which in turn reduces the pool of funds available for investment and capital formation.

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

Besides the level of income, the taxation policies of the government also affect the ability to save.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Even when the income of person is high , he is left with less real income after paying the high taxes levied by the government this then affects both the level of consumption and savings of the person.

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

When the rates of income tax and sales tax are high, the major portion of the earnings of people goes to the government exchequer and very little remains with people to save and invest.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When high rate of taxes (income tax and sales tax)  are imposed by the government ,the real income of the consumers go down and hence the purchasing power falls so in turn savings of the people falls accordingly.