A quick definition from an academic website put it this way: “Capital comprises the physical and non-physical assets (such as education and skills) used in making goods and services. Money is primarily a means of exchanging one good for another.

Money is not capital as economists define capital because it is not a productive resource. While money can be used to buy capital, it is the capital good (things such as machinery and tools) that is used to produce goods and services. Money merely facilitates trade, but it is not in itself a productive resource.

The most common capital goods are property, plant, and equipment (PPE), or fixed assets such as buildings, machinery and equipment, tools and vehicles.

To maintain a strong economy, the federal government seeks to accomplish three policy goals: stable prices, full employment, and economic growth. In addition to these three policy goals, the federal government has other objectives to maintain sound economic policy.

The United States and most other countries have three main macroeconomic goals: economic growth, full employment, and price stability. A nation’s economic well-being depends on carefully defining these goals and choosing the best economic policies for achieving them.

The four essential economic activities are resource management, the production of goods and services, the distribution of goods and services, and the consumption of goods and services.

The three-sector model in economics divides economies into three sectors of activity: extraction of raw materials (primary), manufacturing (secondary), and service industries which exist to facilitate the transport, distribution and sale of goods produced in the secondary sector (tertiary).

Production, consumption and capital formation are called the basic economic activities of an economy. Scarce resources are used in the production of goods and services with the objective of satisfying our needs and wants. So whatever is produced is disposed of either for consumption or for capital formation or both.

Economic activity is the activity of making, providing, purchasing, or selling goods or services. Any action that involves producing, distributing, or consuming products or services is an economic activity. Additionally, any activities involving money or the exchange of products or services are economic activities.