Economics: Capital Goods
Taylor Booth, Sam Poggioli, Casey Tabatabai
Definition of Capital Goods
Casey: Capital goods are defined as man-made, durable items used by businesses to produce goods and services. Capital goods are created by businesses to help create and produce consumer goods. Consumer goods are the products and services that are created by capital goods.
Examples in the Local Marketplace
Casey: There are many different types of capital goods. Any type of item that is man-made and used by businesses to produce goods and services are capital goods. Some examples of capital goods are staplers, scissors, and glue. They are capital goods that are commonly used by businesses and schools. Staplers, scissors, and glue are capital goods because they are man-made and they are used by people to create consumer goods.
How are they Used to Produce Consumer Goods and Services?
Taylor: Capital goods are used to produce goods and services because they are what is used to make the goods and services. Most goods are categorized into either capital goods or consumer goods. Capital goods are the primary factor of production, so that makes the process of making goods and services a lot easier and more efficient. capital goods are tangible and they are used to produce other goods or services during a certain period of time.
How Capital Goods Relate to Factors of Production
Taylor: Capital good relate to factors of production by producing outcome. Capital goods are the primary factors of the factors of production. The ways that capital goods relate to the factors of production because capital goods are the output of what industries produce. Also, capital goods are what can be considered to be primary sources that are produced. Capital goods are a main part of the product in the production process.
The importance of Capital Goods and Impact on Economy
Sam: The importance of capital goods are that capital goods save wealth in the means of production, which means that companies can produce good easier which results in an easier way for the company to produce the goods that we want. Also, another reason why capital goods are important because of the global trade factor. If a country makes the pricing of their goods cheaper, then it will help our economy by slowly and surely moving this country out of debt.
Analysis and Summary of Article
Sam: After reading this article, "Capital Goods Demands Signals Stronger U.S. Growth: Economy" , it's about how the increase in housing and supplies for the military have increased significantly due to our country's debt. Also, the increasing expenses to start a business have increased by 4.5% , the fastest since July 2008. Many financial economists believe that the economy is starting to pick up. A sustained pickup in investment in new equipment, along with increased consumer spending and the prospect of small or federal outlook cuts, is making companies more confident in the economic outlook.