In November 2008, automobile executives from Ford, GM and Chrysler testified to Congress that their firms needed a $25 billion bailout to prevent bankruptcies. The executives stated that part of the cash would be used to re-design production lines. The $25 billion is ________ and the re-designed production lines are ________.
A) financial capital; physical capital
B) gross investment; physical capital
C) physical capital; financial capital
D) net investment; gross investment

Question

Quizplus · Accepted Answer

The $25 billion represents financial capital, which is money used by businesses to buy what they need for their operations. The re-designed production lines represent physical capital, which refers to actual, tangible assets used in production.

In November 2008, Automobile Executives from Ford, GM and Chrysler