The correct term for all human-made goods used to produce other goods and services, such as tools and buildings, is capital goods.
Capital goods are essential in the production process; they are the machines, tools, and buildings that companies use to make products and provide services. Unlike consumer goods, which are meant for final consumption, capital goods are used to create consumer goods or to improve services. For instance, a factory’s machinery is a capital good because it helps produce the final product that will be sold to consumers.
Understanding capital goods is crucial for analyzing how economies function, as they play a significant role in enhancing productivity and fostering economic growth.