Capital good Totally Explained

Everything about Capital Goods totally explained

In economics, capital goods, in contrast to consumer goods, are goods used in the production of (physical) capital. Capital goods refer to real products that are utilized in the production of other products but are not incorporated into other products themselves. They are often called fixed human-made means of production. Capital goods include factories, machinery, tools, and various buildings. They are different from raw materials which are used up in the production of goods. Many goods could be categorized as capital goods or as consumer goods according to usage; for example cars and personal computers, these - and most capital goods - are also durable goods. Capital goods are also different from financial capital. Capital goods are real objects owned by entities (individuals, governments, and other organizations) in order to get a positive return of some sort from production, while financial capital refers to pieces of paper (or other kinds of promises) that represent claims on these types of goods and on other sources of promised future income.

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