Question

Identify the form of capital given below. Give a reason for your answer.

Steel

Answer 1

• Because steel has money value and facilitates production, it is concrete capital.
• If the capital can be used in alternative production lines, it is called floating capital. For example, steel is a capital good that can be used in various production lines (because different types of machines can be made with steel).
• This type of capital is called floating capital. It is also called 'free capital'. Wood, raw materials, electricity, etc., are other examples of floating capital.