Question

What is capital goods?

Hint:

Capital goods are long-term goods used in the production process, unlike consumption goods which are directly consumed.

Answer 1

Step 1: Understanding capital goods.
Capital goods are goods that are used in the production of other goods and services. These goods are not consumed directly but are used to manufacture consumption goods or to facilitate production. Examples include machinery, equipment, and buildings used in factories.

Step 2: Conclusion.
Thus, capital goods are essential for the production process and contribute to the creation of other goods and services.