Question

Write any two differences between Fixed Capital Accounts and Fluctuating Capital Accounts.

Hint:

Fixed Capital = Capital + Current Account, Fluctuating Capital = Only Capital Account.

Answer 1

Under the fixed capital system, the capital balance remains constant, whereas under the fluctuating capital system, the capital balance changes frequently.
In the fixed capital system, separate current accounts are maintained, whereas in the fluctuating capital system, no separate current account is maintained.