Question

A list of goods is given below. Stale whether it is fixed capital or circulating capital

1. Machines
2. Raw material
3. Fuel
4. Office furniture

Answer 1

Fixed capital and circulating capital

• Machines and office furniture are fixed capital which can be used again and again for further production. It is also known as the durable use of producer goods.
• Raw material and fuel are circulating capital which is used only once in production. It is also known as single-use producer goods.