Capital

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  • Man-made facilitators of production are generally referred to as capital. Capital is one of three main factors of production. The others are widely considered to be land and labor, although entrepreneurial (managerial) skill may also be considered. Examples of physical capital are computers, machines, plants, and buildings, which can be used to produce output. Physical capital is subject to depreciation over time, and in the computation of national income, allowance is made for such depreciation. Other forms of capital include financial capital (stocks and bonds) and human capital (education). Capital goods may, alternatively, be referred to as investment goods because they contribute to growth (increased output) in the future.

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