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 ?
Show answer
Answer: B. Fixed capital is tools and machines used for many years; working capital is raw material and money used up in production. Pair 1 is wrong: a plough lasts for years, so it is fixed capital. Pair 2 is correct: a computer is fixed capital. Pair 3 is wrong: yarn is used up, so it is working capital. Pair 4 is correct: petrol is used up, so it is working capital. So only two.
Watch for: A plough is a simple farm tool, so it feels like a working input, but it is used for many years and is fixed capital.
Why the other options are wrong
- A. Wrong because both the computer and petrol pairs are correct.
- C. Wrong because the plough and yarn pairs are mismatched.
- D. Wrong because a plough is fixed capital and yarn is working capital.
Source to check: NCERT Class 9 Economics, Chapter 1 'The Story of Village Palampur' (fixed and working capital)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.