ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Additional or improved capital goods is intended to increase labor productivity by making companies more productive and efficient. Newer equipment or factories leads to more products being produced, and at a faster rate.

Detailed explanation-2: -Examples include plants, office buildings, manufacturing machinery, and vehicles. Spending to purchase these assets is known as capital expenditures (CapEx).

Detailed explanation-3: -Investment in Human Capital means making humans as human resources, i.e, to make them productive so that they contribute to the nation and society. This requires giving them education, medical care, relevant skills etc.

Detailed explanation-4: -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.