Q-14 An Italian restaurant uses the following factors in order to run their busi
ID: 1165058 • Letter: Q
Question
Q-14 An Italian restaurant uses the following factors in order to run their business. Which one of them is an example of physical capital?
The tables and chairs in the restaurant.
The fresh vegetables and meat the restaurant uses in its meals.
The loan that the owner got from the bank in order to finance the restaurant.
The owner's knowledge of how to prepare authentic Italian meals.
Q-15 In the Wall Street Journal article regarding inflation, all of the following were suggested definitions for inflation EXCEPT
rising prices
increase in economic growth
printing money
a.The tables and chairs in the restaurant.
b.The fresh vegetables and meat the restaurant uses in its meals.
c.The loan that the owner got from the bank in order to finance the restaurant.
d.The owner's knowledge of how to prepare authentic Italian meals.
Explanation / Answer
By physical capital we mean a factor of production such as machinery, building etc that is fixed asset.
Option A Is correct.
15. In the article the rising price and printing money are used to define inflation.
When government prints currency in large volume then the flow of money is high due to which the value of money decreases therefore, people have surplus fund available with them due to higher employment level. Due to this the aggregate demand will shift to its right hence prices will increase.
Answer B increase in economic growth.
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