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 ?
- (a) Only one
- (b) Only two ✓ UPSC's answer
- (c) Only three
- (d) All four
Why the answer is (b)
• Physical capital is of two kinds: fixed capital — tools, machines and buildings used over many years — and working capital — raw materials and money that are used up in a single production cycle.
• Pair 2 is correct: a computer is a durable tool used repeatedly, hence fixed capital.
• Pair 4 is correct: petrol is consumed in one use, hence working capital.
• Pair 1 is wrong: a farmer's plough is a durable implement, so it is fixed capital, not working capital. Pair 3 is wrong: yarn is a raw material used up in weaving, so it is working capital, not fixed.
• Hence two pairs are correctly matched, option (b).
Why the other options are wrong
- (a) Only one
- Two pairs (computer and petrol) are correct, not one.
- (c) Only three
- The plough and yarn are misclassified, leaving only two correct pairs.
- (d) All four
- Pairs 1 and 3 are wrong.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2024, held on 16 June 2024. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.