Larry's Lathe-makers Limited produces lathes,which are purchased by furniture manufacturers all over the world.The standard lathe depreciates over a twenty-five-year period.In the national income accounts,the lathes are classified as
A)inventory.
B)raw materials.
C)capital goods.
D)intermediate goods.

Question

Quizplus · Accepted Answer

The lathes produced by Larry's Lathe-makers Limited are considered capital goods because they are used in the production process by furniture manufacturers. They have a long service life of twenty-five years and are used to produce other goods.

Larry's Lathe-Makers Limited Produces Lathes,which Are Purchased by Furniture Manufacturers