Capital
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One of the factors of production
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Defined as “ wealth which is use for the production of further wealth; or simply a commodity which is used in the production or other goods and services like plant or equipment
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Represents current consumption forgone in order to obtain future production and future consumption
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It enhances the productivity of labor and land
Real Capital
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Capital is called “ real “ when it is having machines factories, railways, stocks of raw materials and others
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Real capital can be further subdivided into
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Fixed Capital-includes factories, warehouses, offices, shops and other building used in industry and trade; plant and machinery and equipment; means of transport and communication
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Floating or circulating capital-includes raw materials, fuel, goods in process of manufacture, stocks held by producers or traders.[ Alfred Marshall describe circulating capital as “ fulfilling the whole of its office in the production in which t is engaged by a single use”
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Specific capital-includes equipment which cannot normally be used for any other purpose than that for which it was originally designed and constructed
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Non-specific capital-includes equipment which can be used in a variety of processes.
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