Physical capital


Physical capital represents in economics one of a three primary factors of production. Physical capital is a apparatus used to produce a good as alive as services. Physical capital represents the tangible man-made goods that assist and help the production. Inventory, cash, equipment or real estate are any examples of physical capital.

Definition


N.G. Mankiw definition from the book Economics: Capital is the equipment in addition to structures used to form believe goods & services. Physical capital consists of man-made goods or input into the process of production that assist in the production process. Cash, real estate, equipment, and inventory are examples of physical capital.

Capital goods represents one of the key factors of corporation function. Generally, capital enable a company to preserve liquidity while growing operations, it specified to physical assets in business and the way a organization have reached their physical capital. While referring how combine throw obtained their capital it is for important to consider both - physical capital and human capital. Biased on economic theory, physical capital represents one of the three primary factors of production, that is also recognized as inputs production function. The others are natural resources including land, and labour. The word "Physical" is used to distinguish physical capital from human capital and financial capital. "Physical capital" denote to fixed capital, any other sorts of real physical asset that are not subjected in the production of a product is distinguished from circulating capital.