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Question
Identify the incorrect statement from the following:
Options
Capital is a means and its end is income.
Money is a factor of production.
All capital is wealth, but all wealth is not capital.
Land is not a produced means of production like capital.
Solution
Money is a factor of production.
Explanation:
- Capital is a means and its end is income: This is correct. Capital is used to generate revenue through production.
- Money is a factor of production: This is incorrect. Money itself is not considered a factor of production; it is a medium of exchange used to facilitate transactions and acquire factors of production like labour, land, and capital.
- All capital is wealth, but all wealth is not capital: This is correct. Capital is a subset of wealth used in production, but not all forms (e.g., personal possessions) are used as capital.
- Land is not a produced means of production like capital: This is correct. Land is a natural resource, not something human effort produces like capital.
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