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Q47·GS Paper 1 · Prelims 2024

Physical Capital (Fixed vs Working)

EconomyMacroeconomics & GrowthMatching pairsMediumStatic

Question

With reference to physical capital in Indian economy, consider the following pairs: The following table: Items Category

1Farmer's plough Working capital
2Computer Fixed capital
3Yarn used by the weaver Fixed capital
4Petrol Working capital

How many of the above pairs are correctly matched?

Options

a

Only one

b

Only two

Answer
c

Only three

d

All four

Explanation

Only pairs 2 and 4 are correct. A computer is a durable asset used over many years (Fixed capital). Petrol is consumed in a single use (Working capital). A farmer's plough is an asset used over years, making it Fixed capital, not working. Yarn is raw material consumed during production, making it Working capital, not fixed.

Fixed capital refers to durable assets used repeatedly in production; working capital refers to single-use raw materials and liquid cash.

Answer: (b).

Question details

Year

2024

Paper

GS Paper 1

Question

Q47

Subject

Economy

Sub-topic

Macroeconomics & Growth

Type

Matching pairs

Difficulty

Medium

Nature

Static

Source hint

NCERT Economy Cl.9 Ch.1

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