ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Investment Expenditure-The general meaning of investment Expenditure is that they raise production capacity.

Detailed explanation-2: -An increase in capital per hour (or capital deepening) leads to an increase in labor productivity. For example, consider factory workers in a motor vehicle plant. If workers have increased access to machinery and tools to build vehicles, they can produce more vehicles in the same amount of time.

Detailed explanation-3: -In the long term, a larger physical capital stock increases the economy’s overall productive capacity, allowing more goods and services to be produced with the same level of labor and other resources.

Detailed explanation-4: -The third factor of production is capital. Think of capital as the machinery, tools and buildings humans use to produce goods and services. Some common examples of capital include hammers, forklifts, conveyer belts, computers, and delivery vans. Capital differs based on the worker and the type of work being done.