Capital Goods

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Definition of 'Capital Goods'

Capital goods are physical assets that are used in the production of other goods and services. They are typically long-lived, such as buildings, machinery, and equipment. Capital goods are often contrasted with consumer goods, which are goods that are purchased for personal use.

Capital goods are an important part of the economy because they help to increase productivity. By investing in capital goods, businesses can produce more goods and services with the same amount of labor. This can lead to higher economic growth and higher living standards.

There are a number of different types of capital goods. Some of the most common types include:

* Buildings: Factories, offices, and other buildings are all examples of capital goods. They are used to house businesses and provide a place for workers to work.
* Machinery: Machines are used to produce goods and services. They can range from simple tools, such as hammers and saws, to complex machines, such as robots and assembly lines.
* Equipment: Equipment is a general term that refers to any type of physical asset that is used in the production of goods and services. Examples of equipment include computers, vehicles, and tools.

Capital goods are an important part of the economy, and they play a key role in economic growth. By investing in capital goods, businesses can increase productivity and improve their bottom line.

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