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Economics vocabulary · Core Concepts

Capital

Meaning in economics, with examples

/ˈkæpɪtl/nounCore term

In economics, capital means: Machines, buildings, tools and other man-made resources used to produce goods and services; in finance the word also means money invested in a business.

In Turkish: sermaye, sermaye malları

How it is used

One of the factors of production, next to labour and land. Economists separate physical capital (factories, equipment) from human capital (skills) and financial capital (money). Firms raise, invest and accumulate capital; countries with more capital per worker are usually more productive.

Example sentences

  1. Without new capital, the factory cannot replace its old machines.

  2. Countries that accumulate capital quickly tend to see faster wage growth.

Common collocations

  • physical capital
  • raise capital
  • capital accumulation
  • capital-intensive
  • factors of productionThe basic resources used to produce goods and services, usually listed as land, labour, capital and entrepreneurship.
  • investmentSpending on things that will be used to produce more in the future, such as machines, buildings and software; in GDP data it does not include buying shares.
  • human capitalThe knowledge, skills, health and experience of workers, seen as an asset that raises productivity and income in the same way as machines or buildings.
  • productivityHow much output is produced from a given amount of input, most often measured as output per worker or per hour worked.
  • capital flowsMovements of money between countries for investment, such as buying shares, bonds, companies or property abroad, or lending to foreign borrowers.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Core Concepts

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This page explains English vocabulary for learners. It is not financial advice.