When economists refer to capital, they are referring to the assets—physical tools, plants, and equipment—that allow for increased work productivity. Capital comprises one of the four major factors of production, the others being land, labor, and entrepreneurship. Common examples of capital include hammers, tractors, assembly belts, computers, trucks, and railroads. Economic capital is distinguished from financial capital, which includes the debt and equity accumulated by businesses to operate and expand.
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In economics, capital refers to the assets—physical tools, plants, and equipment—that allow for increased work productivity.
By increasing productivity through improved capital equipment, more goods can be produced and the standard of living can rise.
The four major factors of production are capital, land, labor, and entrepreneurship.
Answer:
When economists refer to capital, they are referring to the assets—physical tools, plants, and equipment—that allow for increased work productivity. Capital comprises one of the four major factors of production, the others being land, labor, and entrepreneurship. Common examples of capital include hammers, tractors, assembly belts, computers, trucks, and railroads. Economic capital is distinguished from financial capital, which includes the debt and equity accumulated by businesses to operate and expand.