Tag: wealth, capital and money

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Questions Related to wealth, capital and money

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

The term capital in economics means ___________.

  1. factor of production

  2. investment in shares and debentures

  3. funds brought in by the entrepreneur

  4. an important city of the state
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

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

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

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

  1. interest

  2. dividend

  3. rent

  4. wages
Reveal answer Fill a bubble to check yourself
A Correct answer
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.

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

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

  1. capital

  2. land

  3. money

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
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.

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

Which of these is not a stage of capital formation?

  1. Saving

  2. Mobilization of savings

  3. Investment

  4. Consumption
Reveal answer Fill a bubble to check yourself
D Correct answer
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.
Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

In economics, the term 'Capital' means -
I. Money introduced in business
II. Things like tools, machines and equipments.

  1. I only

  2. II only

  3. Both I and II

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
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.

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

Social overhead capital mainly includes _______.

  1. transport, irrigation, energy, education

  2. health & medical facilities

  3. union of the above two sets

  4. capital employed in agricultural activities
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Social overhead capital includes all the 'basic' services required in the production process such as,transport,irrigation,energy,education,health and medical facilities.

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

Over the years the rate of gross capital formation has _______.

  1. increased

  2. decreased

  3. remained constant

  4. has not shown any specific trend.
Reveal answer Fill a bubble to check yourself
A Correct answer
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.