Capital
Definition
Capital refers to man-made resources used in production such as machinery, equipment, buildings, and technology.
Analogy
Imagine capital as tools in a toolbox. Just like how tools help a carpenter build something more efficiently, capital helps businesses produce goods and services more effectively.
Related terms
Financial Capital: Financial capital refers to money or funds available for investment or business purposes. It includes savings accounts, stocks, bonds, etc.
Physical Capital: Physical capital specifically refers to tangible assets used in production such as machinery or equipment.
Investment: Investment involves using financial resources (capital) with the expectation of generating future income or profit. It can include purchasing stocks or bonds or buying new machinery for a business.
"Capital" appears in:
Subjects (2)
Study guides (1)
Practice Questions (1)
- If the government gave tax incentives to invest in capital or technology, how would this affect the potential output?
Resources
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