(a) State one important function of capital. (b) Differentiate be… - Vidyadip

Question

(a) State one important function of capital.
(b) Differentiate between:
(i) Capital and wealth
(ii) Capital and income
(iii) Capital and land

✓

Answer

Money and Capital
Money itself cannot be regarded as capital because it itself cannot produce anything. So money cannot be considered a separate factor of production.
Money, when used for starting any business for purchasing machinery, tools, raw materials etc. is regarded as capital.
Capital and Income
Capital is a means and its end is income. The business organisation that a man owns is his capital but the amount of profit that he makes out of it is his income. Therefore, capital is a fund or stock while income is a flow

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