What are the types of capital used in production?
We have discussed factors of production; there are four factors of production – land, labor, capital, and entrepreneurship. Our today’s focus is on the types of capital in the production process. Okay, let’s learn.
Types of capital used in the production process
There are two capital used in production process:
- Physical Capital: Physical capital includes all those tangible resources which are required for further production; like plant & machinery, buildings, equipment, etc.
- Human Capital: Human capital refers to the stock of skill, ability, expertise, education, and knowledge in a nation at a given point in time.