{"id":216463,"date":"2025-05-19T09:42:48","date_gmt":"2025-05-19T09:42:48","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=216463"},"modified":"2025-05-19T09:42:50","modified_gmt":"2025-05-19T09:42:50","slug":"which-of-the-following-do-economists-consider-to-be-capital","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/05\/19\/which-of-the-following-do-economists-consider-to-be-capital\/","title":{"rendered":"Which of the following do economists consider to be capital"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Which of the following do economists consider to be capital?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">a share of IBM stock<br>a savings account<br>a pair of stockings<br>a construction crane<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-0-color\">The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The correct answer is: <strong>a construction crane<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In economics, <strong>capital<\/strong> is one of the four fundamental factors of production, along with land, labor, and entrepreneurship. Economists define <strong>capital<\/strong> specifically as <strong>man-made goods that are used to produce other goods and services<\/strong>. This includes tools, machinery, buildings, equipment, and technology used in the production process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A <strong>construction crane<\/strong> is a quintessential example of capital in the economic sense. It is a <strong>physical, durable asset<\/strong> created by humans to assist in the production of structures and infrastructure. The crane does not produce goods or services for immediate consumption; rather, it enables construction firms to increase productivity, reduce labor demands, and build larger and more complex structures efficiently. Thus, it is classified as <strong>physical capital<\/strong>, more precisely, <strong>fixed capital<\/strong> because it is used repeatedly in the production process over time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let us contrast this with the other choices:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A share of IBM stock<\/strong> represents ownership in a company and potentially a claim on future profits (dividends). While it is a financial asset, it is <strong>not capital in the economic sense<\/strong> because it is not directly used in the production of goods and services. Financial capital facilitates investment but is conceptually distinct from physical capital.<\/li>\n\n\n\n<li><strong>A savings account<\/strong> is also a form of financial capital or wealth storage. Although savings may be used to fund investment (e.g., loans for business purchases), the account itself is <strong>not a productive asset<\/strong>.<\/li>\n\n\n\n<li><strong>A pair of stockings<\/strong> is a <strong>consumer good<\/strong>, meant for final consumption, not for production. It does not contribute to the production of other goods or services.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, <strong>economists reserve the term &#8220;capital&#8221; for tangible, productive assets<\/strong> like machinery, tools, and buildings\u2014making the construction crane the only appropriate choice.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Which of the following do economists consider to be capital? a share of IBM stocka savings accounta pair of stockingsa construction crane The Correct Answer and Explanation is: The correct answer is: a construction crane Explanation: In economics, capital is one of the four fundamental factors of production, along with land, labor, and entrepreneurship. Economists [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-216463","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/216463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=216463"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/216463\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=216463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=216463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=216463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}