ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The category of physical capital includes the plant and equipment used by firms and also things like roads (also called infrastructure). Again, greater physical capital implies more output.

Detailed explanation-2: -Physical capital, as a subset, refers to the durable non-financial assets used in the process of producing goods and services. It is also known as real capital, capital stock, or capital assets. Examples of physical capital include machinery, tools, buildings, inventory, and so on.

Detailed explanation-3: -Physical capital consists of tangible, human-made objects that a company buys or invests in and uses to produce goods. Physical capital items, such as manufacturing equipment, also fall into the category of fixed capital, meaning they are reusable, and not consumed during the production process.

Detailed explanation-4: -Physical capital is the variety of inputs required at every stage during production. It includes fixed capital and working capital. The tools, machines, buildings which can be used in production over many years are called fixed capital.Raw materials and money in hand are called working capital.

Detailed explanation-5: -Physical capital includes the variety of inputs required at every stage during production such as. (a) Tools, Machines, Buildings. Tools and machines range from very simple tools such as a farmer’s plough to sophisticated machines such as generators, turbines, computers, etc. (b) Raw Materials and Money in Hand.