Question

All producer goods are not capital goods. Why?

Answer 1

Producer goods include:

(i) Goods used as raw materials, like wood used to make furniture, and

(ii) goods used can be fixed assets, like plant and machinery. Capital goods include only fixed assets of the producers. These are durable producer goods. On the other hand, goods used as raw material are single-use producer goods. These are not repeatedly used in the process of production. Accordingly, all producer goods are not capital goods.