Question
GSEasyPrelims 2024Economy

With reference to physical capital in Indian economy, consider the following pairs:

ItemsCategory
1. Farmer's ploughWorking capital
2. ComputerFixed capital
3. Yarn used by the weaverFixed capital
4. PetrolWorking capital

How many of the above pairs are correctly matched?

Explanation

  • Farmer's plough - Working capital - Incorrect: A farmer's plough is a long-term asset used repeatedly over time, making it fixed capital.

  • Computer - Fixed capital - Correct: A computer is a long-term asset used over a period of time, making it fixed capital.

  • Yarn used by the weaver - Fixed capital - Incorrect: Yarn is consumed in the production process and needs to be replaced regularly, making it working capital.

  • Petrol - Working capital - Correct: Petrol is consumed in the production process and needs to be replenished regularly, making it working capital.

Therefore, only two pairs are correctly matched.

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