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No. In a centrally planned economy decisions relating to ‘what, how and for whom to produce’ are taken by some central authority of the government.

Addition made to the stock of capital during the year.

(i) Leather used by a shoe making firms.

(ii) Clothes purchased by a firm to prepare shirts.

No. Choice between labour intensive technology and capital intensive technology refers to the problem of ‘how to produce’.

Goods which are used up during the process of production of other goods.

The goods purchased by a firm as a raw material for the Process of production of other goods is known as intermediate goods. e.g. : Steel used in the car.

(b) Selling of shares of public enterprises held by it.

(c) Depreciation... 

Economics is classified into 2 parts. Namely

Microeconomics: It is that part of economic theory which studies the behaviour of individual units of an economy.

Macroeconomics: It is that part of economic theory which studies the behaviour of aggregates of the economy as a whole.

As regards control on rise in the price of the foreign exchange, Central Bank will increase the Bank role. It will attract foreign Direct Investment, that will increase the flow of foreign exchange and it will automatically control the price of foreign exchange. Simultaneously, it will increase the job potentials due to induction of MNCs and common man will be benefitted.

The 3 main reasons for the existence of economic problems are:

• Scarcity resources
• Unlimited human wants
• Alternate Uses

(b) Capital loss.... 

If an enterprise uses the goods Purchased from other enterprises for resale or as raw material, the expenditure on such goods will be intermediate expenditure.

(d) Capital........

Imports of gold by commercial banks and jewellery exporters are called autonomous imports of gold. Restrictions on autonomous imports of goods will directly help in saving foreign exchange. Since the payment of imports is to be paid in terms of dollars, the savings will also be in terms of dollars, our dependency on World Bank will reduce. This savings of foreign exchange may be used to import the essential commodities as well as for capital equipments for economic development.

Stocks are variables measured at a point of time whereas, Flows are variables measured over a period of time.

Example- Stock – Capital and Wealth

Flow – Income per month

Investment per year.

(1) False

(2) False

(3) True

(4) False

Fall in the value of a capital good due to normal wear and tear and foreseen obsolescence, during its use in production.

(i) furniture purchased by school - Final Product.

Reason: School buy furniture for long - term use and it is considered as an investment.

(ii) Chalks, Dusters, etc., purchased by Intermediate product.school-

Reason: These are taken up to be used up completely during the same year.

(i) Computers installed in an office: Final Product

Reason: Office buy computers as long term durable products and are investment for them.

(ii) Mobile sets Purchased by a Mobile Dealer- Intermediate Products.

Reason: A motile dealer purchases mobile sets for the purpose of reselling in the market to earn profit. That is why it is considered as intermediate products.

i) Expenditure on maintenance of an office building- Final Expenditure

Reason- It is for consumption purpose, so it is considered as final expenditure.

(ii) Expenditure on improvement of a machine in a factory - Final expenditure.

Reason - It is a kind of Capital investment. So it is considered as final expenditure.

Reason:

(i) It is final expenditure because it is investment expenditure.

(ii) It is intermediate expenditure because it is an expenditure on single use producer goods.

A variable whose value is measured at a point of time.

Flow variable is a variable whose value is measured over a period of time.

(i) Machine purchased by a dealer of machines is a intermediate goods because it is meant for resale to someone.

(ii) A car purchased by a household is a final goods as it is used for consumption.

Money flows are opposite to real flows. Because money flow are in response to the real flows. Example-There is a real flow of goods and services from the producers to the households. It is in response to it, that the households makes payments to the producers. So, that money flows from the households to producers in terms of consumption expenditure. Likewise, there is a real flow, of factor services from the households to the producers. It is in response to it, that the producers make payments to the households. So that, money flows from producers to the households in terms of factor payments.

Flow variable is a variable whose value is measured over a period of time.

Flows are variables whose magnitude is measured over a period of time.

Detailed Answer: 

Flow variable refers to the variable, which is measured over a period of time.

Consumer Goods- Goods which are capable of satisfying human needs directly are called consumpton goods.

Capital Goods- All goods which help in the production of other goods either as fixed assets or as inventory stocks are called capital goods.

Consumer goods are final goods.

Detailed Answer:

Scarcity is a situation when demand for a good exceeds its supply even at a zero price.