Question

What is meant by physical capital? Give examples. What are the items coming under it?

Answer 1

Hint: In economics, Capital is the term related to financial assets or basically which is money related, like various funds. Every company needs the capital to expand its extent or growth. Basically, there are two types of capital: Physical capital and Human capital.

Complete Answer:
In the capital, there are various types of funds, funds may be of four types namely – Equity, debt, trading, and working. Capital is useful in upgrading and improving businesses of various companies from small scale to large scale. Physical capital is considered as the third primary factor of production. It is used for the production of goods and services. It contains man-made goods. It is considered as one of the important key factors. It helps the company to improve its business and helps for its growth and development. Physical capital is mostly used by business entrepreneurs for the growth of their businesses from small to large scale businesses. It not only provides the benefit to the company but to the country where the business or startup has been started and continued. It helps to maintain the financial condition of a particular business. Examples that come under this term are real estate like buildings, bungalows, offices, shops, etc. Then other examples are cash, machinery, vehicles, inventory, computers, laptops, etc, and various other products or items.

Note: Capital is essential for the growth of any business. Without it, none of the company or business can survive. Due to it, various problems are solved by businessmen and entrepreneurs.