Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Inventories are treated as capital. Addition to the stock of capital of a firm is known as _____________.

Options:

Investment

Equity

Capital

Portfolio

Correct Answer:

Investment

Explanation:

The correct answer is option (1) : Investment

Inventories are considered a component of a firm's capital, and when there is an addition to the stock of capital, it is referred to as"investment." This encompasses various forms of capital expenditure that contribute to the overall assets of a business, including inventory.