Are capital goods purchased by firms (True or False)?
True. Capital goods such as machinery, equipment, and buildings are typically bought by firms to produce other goods and services.
What the statement is really asking
This is about who usually buys capital goods and why.
What counts as a capital good
Capital goods are long-lasting items used to produce other goods and services, for example machines, tools, factory buildings, delivery trucks, and computers used in production.
Who purchases them
Firms purchase capital goods as part of investment spending because they help the firm produce output over time, rather than being used up immediately like raw materials.
Quick check
If the good is mainly used for production (not immediate consumption), the buyer is usually a business, so the statement is true.
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