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state whether true or false give reason

a) capital formation is a flow

b)bread is always a consumer good

c)gross domestic capital formation is always greater than gross fixed capital formation

1. True, Capital formation is a flow concept. This is because it is measured over an interval of time. It changes over a period of time. For example, capital balance measured for a period of six months say from, July 01, 2009 to December 30, 2009. 

2. False, bread is not always a consumer good. It will be regarded as a consumer goods when it is used by the households for final consumption. However, it will be regarded as an intermediate good if it used as input for further production say in a bakery shop, or a restaurant, etc. 

3. True, Gross Domestic Capital Formation is greater than Gross Fixed Capital Formation. This is because Gross Domestic Capital Formation includes Gross Fixed Capital Formation along with change in stock. 

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