What are Capital Goods in class 12 CBSE Board?

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What are Capital goods and how are they different from consumption goods in Class 12.

Here we are going to discuss the definition of Capital goods according to the syllabus of class 12 CBSE Board.

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  • what are capital goods
  • what is a capital goods example
  • What is the importance of capital goods
  • Is electricity a capital good

You must have read the Capital Goods term in the National income chapter of Macro-Economics. See, in order to calculate national income, we need to determine what is final goods are.

You might have come across the most popular three terms consumption goods, Capital goods, and intermediate goods too.

Out of these, we have to determine which is the final goods.

However, if you are confused about these three terms. Read the below article to have a better understanding.

Difference b/w consumption goods, capital goods, and intermediate goods

So, let’s understand what actually Capital Goods are

Definition of Capital Goods

See, here the definition of capital goods is only restricted to the syllabus of the Class 12 CBSE Board.

Goods capable of being used for producing other goods are called capital goods.


For Example:- Machinery, Buildings, Equipment.

Difference between Capital Goods and Consumption Goods

The basic difference of consumption goods is capital goods are only purchased by Producers. The main function of capital goods is to produce other goods.

On the other hand consumption goods are those goods which are purchased by the end consumers for only consumption purposes. Such goods are purchased by the end consumers.

Further Reading

1.What is Macroeconomics
2.What are Goods in economics
3.What are Consumption Goods
4.What are capital goods
5.What are intermediate Goods
6.What is intermediate consumption
7.What are final Goods
8.What is Final Consumption
9.What is investment in economics
10. What is stock and flow
11.What are transfer payments
12.What is circular flow of income
13.What is Domestic Territory of a Country
14.What is normal resident of a country
15.Nominal GDP and Real GDP
1.What is GDP Deflator
2.What are externalities in economics
3.Limitations of GDP as a measure of welfare
1.Items to be included in National income
2.Items to be included in Domestic Income
1.National Income and Related Aggregates, formula, Definition, process
2.Value added Method, formula, Definition, process
3.Income Method, formula, Definition, process
4.Expenditure Method, formula, Definition, process
1.150+ Numerical of Value Added Method
2.150+ Numerical of Income Method
3.150+ Numerical of Expenditure Method
4. 150+ Numerical of National Income and related aggregates
1.250+ MCQs of National Income
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Anurag Pathak
Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.

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