Question

State whether the following statement is TRUE and FALSE.

Capital is a natural factor of production.

Options

• True

• False

Answer 1

Capital is a natural factor of production. – False

Explanation:
The above statement is incorrect. Capital includes money invested in the business, machinery and tools which are produced and invested in by the human beings. Unlike land, capital is not a natural factor of production. It is not a gift of nature. Rather, it is a man-made factor of production. Thus, capital is regarded as an artificial factor of production.