Question:
Which of the following statements best explains the concept of ‘capital’ in economics?
(1) Capital represents human labour and innovation in the production process.
(2) Capital includes only the tangible assets used for production, such as machines and buildings.
(3) Capital refers to any financial investment made by individuals.
(4) Capital refers to financial resources used to fund production.
(5) Capital refers to produced means of production.
Correct Answer:
(5)
Answer Explanation:
In economics, ‘Capital’ is strictly defined as “produced means of production”—man-made physical goods used to produce other goods (e.g., machinery, tools, factories). It is distinct from financial capital (money) or land.
Topic: Factors of Production Year: 2024
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