With reference to physical capital in Indian economy, consider the following pairs: | Items | Category | |———————|——–| | 1. Farmer’s plough | Working capital | | 2. Computer | Fixed capital | | 3. Yarn used by the weaver | Fixed capital | | 4. Petrol | Working capital | How many of the above pairs are correctly matched?
Explanation
* Farmer's plough - Working capital - Incorrect: A farmer's plough is a long-term asset used repeatedly over time, making it fixed capital.
* Computer - Fixed capital - Correct: A computer is a long-term asset used over a period of time, making it fixed capital.
* Yarn used by the weaver - Fixed capital - Incorrect: Yarn is consumed in the production process and needs to be replaced regularly, making it working capital.
* Petrol - Working capital - Correct: Petrol is consumed in the production process and needs to be replenished regularly, making it working capital.
Therefore, only two pairs are correctly matched.