Items
Category
1. Farmer’s plough
Working capital
2. Computer
Fixed capital
3. Yarn used by the weaver
4. Petrol
How many of the above pairs are correctly matched?
(a) Only one(b) Only two(c) Only three(d) All four
Answer:
(b) Only two
Explanation:
Farmer’s plough - Working capital: Incorrect. A farmer’s plough is considered fixed capital because it is a long-term asset used in the production process.
Computer - Fixed capital: Correct. A computer is a fixed capital as it is a durable good used in the production process over a long period.
Yarn used by the weaver - Fixed capital: Incorrect. Yarn is working capital because it is a raw material that gets used up in the production process.
Petrol - Working capital: Correct. Petrol is considered working capital because it is consumed in the process of running machinery and vehicles.
Therefore, pairs 2 and 4 are correctly matched, making option (b) the correct answer.
918 questions
894 answers
19 comments
4.8k users