Capital goods are fixed assets which are used in the productive process in order to produce a finished ‘consumer’ good. Capital goods are not bought for their own utility; they are bought in order to be used in the productive process. Examples of Capital Goods Factories Offices Machines Printing press Combine harvester Assembly line In …
Capitalism is an economic system based on free markets and limited government intervention. Proponents argue that capitalism is the most efficient economic system, enabling improved living standards. However, despite its ubiquity, many economists criticise aspects of capitalism and point out is many flaws and problems. In short, capitalism can cause – inequality, market failure, damage …
Capital spending is investment spending on increasing your fixed assets, for example, building a hospital, buying equipment or building a new road. See also: Gross fixed capital formation Current spending is expenditure on day to day running costs, for example, government spending on wages of public sector workers or buying raw materials. One major difference …
The main difference between capitalism and socialism is the extent of government intervention in the economy. A capitalist economic system is characterised by private ownership of assets and business. A capitalist economy relies on free-markets to determine, price, incomes, wealth and distribution of goods. A socialist economic system is characterised by greater government intervention to re-allocate …
Capitalism is an economic system characterised by: Lack of government intervention Means of production owned by private firms. Goods and services distributed according to price mechanism (as opposed to government price controls) Capitalism – pros and consWatch this video on YouTube Pros of capitalism “A society that puts equality before freedom will get neither. A …
Readers Question: What are the advantages of capitalism? Capitalism is an economy based on free markets where resources and firms are privately owned. In practice, this usually involves some state intervention to protect private property and regulate certain aspects of the economy. Most would argue that the UK and US is essentially capitalist despite the …
Human Capital is a measure of the skills, education, capacity and attributes of labour which influence their productive capacity and earning potential. According to the OECD, human capital is defined as: “the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to produce goods, services …
Capital depreciation refers to the decline in value of a capital asset. To give a simplified example, if a machine is bought for $10,000 but only has a useful lifespan of five years, then every year, the value of this machine will decline by $2,000. After three years, the machine is worth $4,000. There has …