With reference to physical capital in Indian economy, consider the following pairs : Items — Category 1. Farmer's plough — Working capital 2. Computer — Fixed capital 3. Yarn used by the weaver — Fixed capital 4. Petrol — Working capital How many of the above pairs are correctly matched?
- A.Only one
- B.Only two
- C.Only three
- D.All four
Correct answer
Explanation
The correct answer is B, Only two. Pairs 2 and 4 are correct; pairs 1 and 3 have the categories the wrong way round.
Physical capital is split by how long it lasts in production. Fixed capital is made up of tools, machines and buildings that are used again and again over many years, such as a plough or a computer. Working capital is the raw material and fuel that is used up in a single round of production, such as yarn turned into cloth or petrol burnt in an engine. So the plough is fixed capital, not working capital, and the weaver's yarn is working capital, not fixed capital, while the computer (fixed) and petrol (working) are matched correctly.
A is wrong: two pairs, not one, are correct.
C is wrong: pairs 1 and 3 are mismatched, so three cannot be correct.
D is wrong: the plough and the yarn are wrongly classified.
Exam tip: used many times = fixed capital (plough, machine, computer); used up once = working capital (yarn, fuel, seeds).
Practice Questions
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- A.Personal Income - Direct taxes paid by households and miscellaneous fees, fines, etc.
- B.Private Income - Saving of Private Corporate Sectors - Corporation Tax
- C.Private Income - Taxes
- D.Total expenditure of Households - Income Tax - Gifts received
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Organization : Union Ministry
I. The National Automotive Board : Ministry of Commerce and Industry
II. The Coir Board : Ministry of Heavy Industries
III. The National Centre for Trade Information : Ministry of Micro, Small and Medium Enterprises
How many of the above pairs are correctly matched?
- A.Only one
- B.Only two
- C.All the three
- D.None
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1. Cut and optimize the Statutory Liquidity Ratio
2. Increase the Marginal Standing Facility Rate
3. Cut the Bank Rate and Repo Rate
Select the correct answer using the code given below:
- A.1 and 2 only
- B.2 only
- C.1 and 3 only
- D.1, 2 and 3
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1. Formation of India's own Internet companies like China did.
2. Establish a policy framework to encourage overseas multinational corporations that collect Big Data to build their large data centres within our national geographical boundaries.
3. Connect many of our villages to the Internet and bring Wi-Fi to many of our schools, public places and major tourist centres.
Select the correct answer using the code given below:
- A.1 and 2 only
- B.3 only
- C.2 and 3 only
- D.1, 2 and 3
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Read the full explanation →With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic?
- A.It is the investment through capital instruments essentially in a listed company.
- B.It is a largely non-debt creating capital flow.
- C.It is the investment which involves debt-servicing.
- D.It is the investment made by foreign institutional investors in the Government securities.
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