In​ economics, the term capital refers to

Question: In​ economics, the term capital refers to

1. the difference between a​ firm’s assets and its liabilities.
2. physical capital, such as machinery, that is used to produce other goods.
3. financial resources used by businesses to hire resources.
4. the process of raising funds from venture capitalists

Answer and Explanation

In economics terms, the capital means a physical assets which are purchased or taken on rent for producing goods and services.
Hence it can be said that capital refer to physical capital, such as machinery which are used for the production of another goods.
Hence option B is the correct answer.