Question

Which of the following statements defines the term 'Capital' more appropriately?

• A. Capital is a flow concept
• B. Capital is the asset created by human efforts and not available in a natural form
• C. Capital is the same as money
• D. Capital is comprised of only tangible assets

Hint:

Capital is a human-made resource used to produce other goods and services. It's a stock concept, not a flow. Think of factories, tools, and skills as examples.

Answer 1

The Correct Option is B

Step 1: Capital is a stock concept, not a flow, ruling out option 1.
Step 2: Money is only a medium of exchange, not capital itself, ruling out option 3.
Step 3: Capital includes intangible assets too, ruling out option 4.
Correct option: Capital is the asset created by human efforts and not available in a natural form.