Capital goods

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A capital good, investment good, or simply capital, is any product that is used in the distribution and production of goods and services. Capital goods help increase the future capacity of production of a country. For example, equipment, machines, plows, buildings, factories, etc.

Developed countries having created more capital goods than poor countries is one reason for their economic success. The country with a superior capital good will more than likely be more efficient and produce a better quality of consumer goods. When these goods are scarce, consumer goods are limited in return, and a society is usually very poor.