State whether the following statements are true of false. Give reasons for your answer : (a) Capital formation is a flow. (b) Bread is always a consumer good. Buuter is only a final product.

State whether the following statements are true of false. Give reasons

1.	State whether the following statements are true of false. Give reasons for your answer : (a) Capital formation is a flow. (b) Bread is always a consumer good. Buuter is only a final product.
Answer» (a) True. Capital formation is measured over a period of time. (b) False. It depends on the use of bread. When it is purchased by a household, it is a consumer good. If it is purchased by hotel, it is a producer (intermediate) good. (c) False. It depends on the end use of butter. If it is purchased by a baker cakes, then it is an intermediate good.