Physical Capital

Physical capital refers to the tangible assets used in production to create goods and services. This includes machinery, tools, buildings, vehicles, and equipment that help workers do their jobs efficiently. Essentially, physical capital is the human-made resources that support and enhance the productivity of labor. Investing in physical capital can lead to increased output and economic growth, as businesses improve their processes and expand capacity. It is a key component of an economy’s infrastructure, enabling industries to operate effectively and meet consumer demand.