What does capital mean in economics, finance, and accounting?
Q: What does capital mean in economics, finance, and accounting?
A: Capital generally refers to financial wealth, particularly used to start or maintain a business.
Q: What is capital in classical economics?
A: Capital is one of the four factors of production in classical economics. The others are land, labor, and organization.
Q: What are capital goods?
A: Capital goods are goods that can be used in the production of other goods. They are made by humans unlike "land," which refers to naturally occurring resources like geographical locations and minerals. They are not used up directly in the process of production, unlike raw materials or intermediate goods.
Q: How are capital goods different from consumer goods or durable goods?
A: Capital goods are different from consumer goods or durable goods due to the fact that they can be used in the production of other goods, are made by humans, and are not used up immediately in the process of production.
Q: Was the third part of the definition always used by classical economists?
A: No, the third part of the definition was not always used by classical economists.
Q: Which classical economist used the above definition for the term fixed capital, while including raw materials and intermediate products as part of world life?
A: David Ricardo, the classical economist, used the above definition for the term fixed capital, while including raw materials and intermediate products as part of world life.
Q: Define "fixed capital."
A: "Fixed capital" is the term used by David Ricardo to refer to goods with the following features: made by humans, used in the production of other goods, not used up immediately in the process of production, and includes raw materials and intermediate products as part of world life.
