The term ʺcapital,ʺ as used in macroeconomics, refers to
A) investment.
B) financial wealth.
C) the sum of investment and government purchases of goods.
D) the plant, equipment, buildings, and inventories of raw materials and semi-finished goods.

Question

Quizplus · Accepted Answer

In macroeconomics, the term "capital" refers to the physical assets that are used in the production process, such as plant, equipment, buildings, and inventories of raw materials and semi-finished goods. This definition is captured in option D. Option A refers specifically to investment, which is only one component of capital. Option B refers to financial wealth, which can be used to purchase capital but is not the same thing as capital itself. Option C refers to the sum of investment and government purchases of goods, which is a part of total spending in the economy but not a complete definition of capital.

The Term ʺCapital,ʺ as Used in Macroeconomics, Refers to