Increase in stock of goods held by a consumer will contribute to capital formation
True or False with Reason:
Increase in stock of goods held by a consumer will contribute to capital formation.
Anurag Pathak Changed status to publish December 11, 2023
False,
Any increase in the stock of goods held by a consumer does not contribute to capital formation as it is assumed that such goods are consumed, the moment they are purchased.
In other words, the goods purchased by a consumer are meant to satisfy their wants and are just consumed. Such goods do not contribute in the current flow of goods and services.
In simple words, these goods do not help in producing new goods and services in the economy.
Anurag Pathak Changed status to publish December 11, 2023
