With reference to physical capital in Indian economy, consider the following pairs:
Items: Category
1. Farmer'

Question

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?

Accepted Answer

Fixed capital refers to durable assets used in production that are not consumed in the production process, such as machinery and buildings. Farmer's ploughs, computers, and yarn are examples of fixed capital. Working capital, on the other hand, consists of goods that are used up or transformed during the production process, like raw materials or fuel. Petrol, used as fuel, represents working capital.