Question

Explain four requirement of goods and services what items come under physical capital

Answer 1

The four requirements of production of goods and services are land, labor, physical capital and human capital. Land is the physical place where all the economic activity takes place. Land plays an important role in production. Labor - It seems obvious but things cannot be produced unless someone makes them. So, labor is also too important. Physical capital refers to variety of inputs that are needed at different stages of production such as tools, machinery etc. Human capital is the requirement of production of goods and services. Human capital is knowledge and effort.