Capital goods are used by businesses to produce goods and enhance efficiency, appearing on financial statements as fixed assets subject to depreciation.
Capital goods can depreciate over time like equipment, while depletion occurs when raw materials are used up in manufacturing processes.
Differentiating capital goods from consumer goods involves understanding their purchasers: businesses buy capital goods for production, while end-users buy consumer goods.
Purchasing capital goods is essential for economic growth, as it involves investments in production, contrasting with consumer goods bought by customers for personal use.
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