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.

So, let’s understand what actually Capital Goods are

Definition of Capital Goods or Producers 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.

Types of Capital (Producers) Goods

The capital goods can further be classified as Single-use capital (producers) goods and durable-use capital (producers) goods.

a) Single-use Capital Goods

These goods are used up in a single act of production. Such goods are coal,
paper, cotton, etc.

For example, used in printing books and cotton is used in textile industries.

Once use, these goods lose their original shape.

Durable use capital or producers goods

These goods are used by the production units again and again. These are used in producing other goods for a long period of time.

They also do not lose their original shape and size.

For example:- machines, plants, buildings, tools, cars, tractors, etc.

Difference between Capital Goods and Consumption Goods

The basic difference between 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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