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Question
Identify the form of capital given below. Give a reason for your answer.
Steel
Answer in Brief
Solution
- Because steel has money value and facilitates production, it is concrete capital.
- If the capital can be used in alternative production lines, it is called floating capital. For example, steel is a capital good that can be used in various production lines (because different types of machines can be made with steel).
- This type of capital is called floating capital. It is also called 'free capital'. Wood, raw materials, electricity, etc., are other examples of floating capital.
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Chapter 1: Factors of Production - Exercise [Page 30]
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