Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Which of the following is a feature of consumer durable goods which is common for capital goods also?

Options:

they are not extinguished by immediate or even short period consumption

they also undergo wear and tear with gradual use

both 1 and 2

none of the above

Correct Answer:

both 1 and 2

Explanation:

The correct answer is option 3: both 1 and 2

Some commodities like television sets, automobiles or home computers, although they are for ultimate consumption, have one characteristic in common with capital goods – they are also durable. That is, they are not extinguished by immediate or even short period consumption; they have a relatively long life as compared to articles such as food or even clothing. They also undergo wear and tear with gradual use and often need repairs and replacements of parts, i.e., like machines they also need to be preserved, maintained and renewed. That is why we call these goods consumer durables.