What is fixed capital and working capital?
1. Tool and machines, building range from very simple tools such as a farmers’ plough to sophisticated machines generator, turbines, computers etc. Tools, machines. Building can be used in production over many years. These are called fixed capital.
2. Production requires a variety of raw materials such as yarn, used by the weavers and clay used by the potter. Also some money is always required during production to make payments and buy other necessary items. Raw material and money in hand are called working capital.
