ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Things from nature used to produce goods
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People used to produce goods
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Machines, tools, and buildings used to produce goods
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None of the above
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Detailed explanation-1: -Capital goods are physical assets that a company uses in the production process to manufacture products and services that consumers will later use. Capital goods include buildings, machinery, equipment, vehicles, and tools. Capital goods are not finished goods, instead, they are used to make finished goods.
Detailed explanation-2: -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.
Detailed explanation-3: -Capital goods are man-made, durable items used by businesses to produce goods and services. They include tools, buildings, vehicles, machinery, and equipment.
Detailed explanation-4: -The four major types of capital include working capital, debt, equity, and trading capital.
Detailed explanation-5: -It is useful to differentiate between five kinds of capital: financial, natural, produced, human, and social. All are stocks that have the capacity to produce flows of economically desirable outputs. The maintenance of all five kinds of capital is essential for the sustainability of economic development.