Define Physical Capital, Fixed Capital, Working capital and Human capital with example.
Answers
Answer:
physical capital
Physical capital refers to a factor of production (or input into the process of production), such as machinery, buildings, or computers. In economic theory, physical capital is one the three primary factors of production, also known as inputs production function.
Fixed capital
Fixed capital is capital or money that we invest in fixed assets. In other words, money that we invest in assets of a durable nature. These are assets that we repeatedly use over a long period. We can also use the term 'fixed investment' with the same meaning. ... So are plant and equipment.
working capital
The cash available for day-to-day operations of an organization. Strictly speaking, one borrows cash (and not working capital) to be able to buy assets or to pay for obligations. Also called current capital. ... The amount of available working capital is a measure of a firm's ability to meet its short-term obligations.
human capital
Human capital is a loose term that refers to knowledge, experience and skills of an employee. ... It states that companies have an incentive to seek productive human capital and to add to the human capital of their existing employees.
Explanation:
physical capital is one of the three primary factors of production, also known as inputs in the production function. The others are natural resources (including land), and labor—the stock of competences embodied in the labor force.
capital invested in fixed assets is called fixed capital
the capital of a business which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.
the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country. this is called human capital
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