Question

In economics, capital refers to a. the finances necessary for firms to produce their products. b. buildings and machines used in the production process. c. the money households use to purchase firms' output. d. stocks and bonds.

Answer 1

b. buildings and machines used in the production process

Step-by-step explanation:

In economics, capital is one of the four factors of production. It refers to the assets used in the production of other goods and services. These assets include buildings, plants, and machinery used in manufacturing, and are not part of the output. Capital includes financial assets needed in facilitating the production process.

In finance and accounting, capital will refer to money or cash equivalents. In economics, capital is not limited to finances only. It includes all the assets used to create wealth. Minerals, equipment, and intangible assets such as copyrights and patents are considered as capital.