Capital goods

In economics, capital goods refer to real products that are utilised in the production of other products but are not incorporated into the 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.

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.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.

External links

*Ludwig von Mises on the role of factors of production

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