Economists use the word "capital" to mean
A) the tools, instruments, and other produced goods used to produce goods and services.
B) the funds that firms use to buy and operate their businesses.
C) purchases in the market for stocks and bonds.
D) the workers that firms employ to produce goods and services.
E) people's skills and talents.

Question

Quizplus · Accepted Answer

Economists use the term "capital" to refer to the tools, equipment, and other types of produced goods that are used in the production of goods and services. This includes things like factories, machines, and vehicles.

Option B refers to financial capital, which is a subset of capital that refers to the funds that businesses use to operate.

Option C refers to financial instruments like stocks and bonds, which are investments but not necessarily part of the capital that firms use to produce goods and services.

Option D refers to labor, which is a critical input in the production process, but not the same thing as capital.

Option E refers to human capital, which is an important concept in economics but does not encompass all of the types of capital that economists refer to.

Economists Use the Word "Capital" to Mean