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"Machine purchased by a firm is always a capital good." Do you agree with the given statement? Give valid reasons for your answer. - Economics

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प्रश्न

"Machine purchased by a firm is always a capital good."

Do you agree with the given statement? Give valid reasons for your answer.

विकल्प

  • Agree

  • Disagree

MCQ

उत्तर

I disagree with the given statement.

Explanation:

Capital goods are those final goods which help in the production of other goods and services. A machine purchased by a firm will be a capital good when it is used for the production of other goods and services. However, if it is purchased by a firm for resale purposes in the same year, it will be considered as an intermediate good and not a capital good.

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Basic Concepts - Capital Goods
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