ECONOMICS (CBSE/UGC NET)

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.

Detailed explanation-2: -Physical capital is the stock of equipment and structures that are used to produce goods and services.

Detailed explanation-3: -Capital goods are also sometimes referred to as the means of production because these physical and non-financial inputs create objects that can eventually be bestowed with economic value.

Detailed explanation-4: -Physical capital consists of items like machinery, buildings, equipment, etc. Physical capital includes man-made goods that are used in the process of production for converting raw material to finished goods. Any new project requires a significant amount of investment in the physical capital.

Detailed explanation-5: -The third factor of production is capital. Think of capital as the machinery, tools and buildings humans use to produce goods and services.