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Question
Write short notes Types of capital.
Solution
Capital can be classified into the following categories:
On the basis of ownership:
- Private capital - It is owned by private individuals or institutes.
- Public capital - It is owned by the government or a society.
On the basis of mobility:
- Sunk capital - It is the capital which is used only for a specific purpose.
- Floating capital - It is the capital which is used for a variety of purposes.
On the basis of nature:
- Real capital - It is the capital which is used in the production of other goods.
- Money capital - It is the capital which is in the form of money used to purchase real capital.
On the basis of durability:
- Fixed capital - It refers to the capital which is used in the process of production repeatedly.
- Working capital - It refers to the capital which is used in the process of production only once.
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