QUESTION

Easy

Economy

Prelims 2024

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?

Select an option to attempt

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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