capital goodes question

Discussion in 'CT7' started by forza_bologna, Aug 23, 2011.

  1. forza_bologna

    forza_bologna Keen member

    Question 4A.2 of CT 7 (2011 edition) asks:

    Which of the following are capital goods:

    (i) a newly built factory
    (ii)a school,
    etc.


    The answer says (ii) is true, that a school is a capital good

    The definition says:
    "Capital - All inputs into production that have themselves been produced (e.g. factories, machines and tools)."

    Can somebody explain me why "a school" is a capital good? In my view, it does not enter into production.


    Many thanks
     
  2. freddie

    freddie Member

    "Production" covers services too, so a school is included as capital since it produces education.
     

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