ECONOMICS: Capital Goods

Ava B., Boman R., and Elhan M.

Capitals Goods Defined

Capital goods are defined as man-made, durable items used by businesses to produce goods and services. These items include tools, machinery and equipment. They are one of the four factors of production, along side labor, natural resources and entrepreneurship.


Examples in the Local MarketPlace

Definition: An open space where a market is or was formerly held in a town.

Examples of the local marketplace for a capital good is any type of factory or warehouse that uses machines and tools.


How are Capital Goods Used to Produce Consumer Goods and Services

Since Capital goods are those used to produce other goods, they are manufacturing the goods which consumers will purchase.


How Do Capital Goods Relate to Products of Function

Capital goods relate to products of function because without capital, a business would not have the resources to develop, advertise, and transport those products. Capital goods are each made to make other goods. There are many Capital goods, which all serve to make products, some of which are products of function.


The Importance of Capital Goods & Impact on Economy

Importance of Capital Goods: Capital goods help to increase the production of goods for consumption. They are use to create products that satisfy consumers. Production of finish goods for consumption is important in production of goods and services.

Impact that Capital Goods Have on the Economy: Capital Goods drive the success of the U.S's economy. The U.S. has been a technological innovator in creating capital goods for hundreds of years. They are important because they create more manufactured goods. Manufactured Goods are some of the most well paid position, making an average of  $70,000 a year. America's success as a producer of capital goods has created advantages for the country, making the U.S the world's largest economy.


Article Analysis

This article: Capital Goods Demand Signals Stronger U.S. Growth: Economy, touches on the importance of the demand on capital goods on the economy in 2013. It analyzes the importance of lasting goods, like computers and machines that excelled in November the most of the year. It also informs the reader on the success of new-home sales compared to the predictions, showing a larger expansion in the economy approaching the U.S in 2014.


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