Question

What are capital goods? 

Answer 1

Capital goods refer to those final goods that are purchased by the producers (firms) for using them in the process of production. These goods enable the production to take place and thus, act as a fixed asset for the producers. These goods form an important part of the process of production. They are durable in nature and undergo wear and tear only after a long period of time and with repeated use. Also, generally these goods carry a high market value. For example, machinery, etc.