Tugas Reading

Exercises

1. Answer these questions, basing your answers on the text.


a. What is profit ?
b. At what point does an employer obtain his surplus ?
c. Who may he be required to share it with ?
d. What do most businesses need ?
e. Why is there always an element of risk in providing capital ?
f. Who bears the risk ?
g. What justifies the risk ?
h. How is the past used to finance the future ?
i. What do people 'plough back' into the system ?
j. Why is it ploughed back ?
k.What examples of private capital are given ?
l. What examples of public capital are given ?

  Answers

a. Profit is the surplus which accumulates as a result of productive work.
b. The employer obtains this surplus after he pays the necessary expense of his business and the wages of his
    employees.
c. He may be required to share the surplus with others who have provided the capital with which he started
    his business.
d. Most businesses need capital in order to start productive work, and the capital pays for the accomodations
    , machinery and other items which the business needs.
e. There is always an alement of risk in providing capital and starting a business.
f. The employees.
g. If the business is successful, the risk has been justified and invested capital earns part of the profits as a
   return on the investment.
h. The capital which people provide to help new business is an accumulation of previous surpluses on
    previous business activities. In this way the past is used to finance the future.
i. As such, it is common to both the capitalistic and communistic systems. In both systems, a certain part of
   the profits 'ploughed back' into the system in order to create capital.
j. Such capital is accumulated by a deliberate policy of saving surpluses. This policy may be personal and
   individual, or it may be public and collective.
k. Land, houses and shares in a business are capital.
l. In terms of the state, all railways, docks, Roads, airports and state funds of money are part of the nation's
  capital.