(a)
1. building—Fixed capital
2. tailors — Circulating Capital
3. sewing machines — Fixed capital
4. tailoring accessories — Circulating capital
(b)
1. Income tax; which is imposed on the income of the earners.
2. Profit tax; which is levied on the profit of the entrepreneurs.
(c) CRR [Cash Reserve Ratio]: According to RBI act, each commercial bank has to keep a certain ratio of cash reserves (deposits) with the central bank or RBI. The RBI is empowered to vary this CRR between 3% to 15%. By increasing the CRR, the excess reserve of commercial bank is reduced, which restricts the credit granting capacity of the commercial banks. Similarly, the reduction in CRR, increases the capacity of commercial banks to expand credits.
(d) Hypothetical market demand schedule :
| Price of oranges (Rs. per kg) |
Demand by A (kg) |
Demand by B (kg) |
Demang by C (kg) |
Demand by D (kg) |
Quantity of oranges demanded (kg)
A + B + C + D
(market demand) |
| 30 |
5 |
8 |
7 |
10 |
30 |
| 24 |
7 |
10 |
9 |
12 |
38 |
| 18 |
9 |
12 |
11 |
14 |
46 |
| 12 |
10 |
14 |
14 |
16 |
54 |
| 06 |
14 |
16 |
16 |
18 |
64 |
(e) Money acts as a store of value. It means people can store their wealth in the form of money. Money is the most liquid form of wealth and it can foe stored without loss in value. Money enables people to save a part of their current income and store it for future use.
