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 refers to any financial investment made by individuals.
(3) Capital includes only the tangible assets used for production, such as machines and buildings.
(4) Capital refers to financial resources used to fund production.
(5) Capital refers to produced means of production.
Correct Answer:
(5)
Answer Explanation:
In economic theory, “capital” specifically refers to human-made resources (such as machinery, tools, and factories) that are utilized in the production process to create other goods and services. It is the “produced means of production.”
Topic: Factors of Production Year: 2024
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