Capital is a factor of production. Which of the following is an example of capital?
i. $1,000 in money
ii. 100 shares of Microsoft stock
iii. $10,000 in bonds issued by General Motors
iv. A drill press in your local engineering firm

Question

Quizplus · Accepted Answer

Capital, in economic terms, refers to assets used for the production of goods and services, such as machinery, tools, and buildings. Money and financial instruments like stocks and bonds are not considered capital in this context because they do not directly contribute to production. A drill press in an engineering firm, however, is a piece of equipment used in the production process, making it an example of capital.

Capital Is a Factor of Production