Q. 164.2( 5 Votes )

Explain the term

Answer :

Physical capital is the input which is used at various stages of production of goods and services. It is one of the factors of production. There are two types of physical capital: fixed capital and working capital.

Fixed capital includes those assets which can be used over many years in the process of production like machines in factory, building, tools etc.


Working capital includes raw materials which will be converted into finish goods and money in hand which will be required to purchase raw material or any other item during production.


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