Is electricity capital good?

Capital goods are tangible assets that contribute to the production of other goods and services. These assets have a long-lasting nature and are essential for the growth and development of an economy.

Machinery and plants are examples of capital goods that are used in the manufacturing sector. They are designed to increase production efficiency and reduce labor costs. The use of these assets allows businesses to produce goods at a larger scale and with greater precision.

Buildings, on the other hand, are used as a physical infrastructure for various activities such as offices, factories, and warehouses. They provide a stable and secure environment for businesses to operate and grow.

Tools are also classified as capital goods as they are used to perform specific tasks and are essential for the production process. From simple hand tools to complex machinery, these assets play a crucial role in the manufacturing sector.

In addition to tangible assets, some intangible assets can also be considered as capital goods. For instance, electricity and coal are essential for powering factories and machinery, making them crucial for the production process.