In economics, capital goods refer to goods which are primarily used for which of the following purposes?

Introduction / Context:
In basic economics, goods are often classified into consumer goods and capital goods. This classification is important for understanding how resources are allocated between current consumption and future production. Capital goods are essential for expanding the productive capacity of an economy. This question asks what capital goods are used for, which is central to understanding investment and growth.

Given Data / Assumptions:
- The term under consideration is capital goods, that is, goods used in production.
- Four possible descriptions are given: raising further capital, helping in production of goods, directly satisfying wants and having multiple uses.
- We assume standard textbook definitions of consumer goods and capital goods.

Concept / Approach:
Capital goods are man made resources such as machinery, tools, factory buildings and equipment that are used to produce other goods and services. They do not directly satisfy human wants but help in creating goods that do. Consumer goods, by contrast, directly enter into the satisfaction of final consumer wants, such as food, clothing and entertainment. The key distinguishing feature of capital goods is their role in further production.

Step-by-Step Solution:
Step 1: Examine option B: helping in the further production of other goods and services. This precisely captures the role of capital goods.Step 2: Examine option A: serving as a direct source of raising further financial capital. Financial capital refers to funds and securities, not physical capital goods, so this description is misleading.Step 3: Examine option C: directly satisfying human wants. This is the definition of consumer goods, not capital goods.Step 4: Examine option D: finding multiple uses. While some capital goods may indeed have multiple uses, this is not the defining characteristic; many consumer goods also have multiple uses.

Verification / Alternative check:
You can verify by thinking of examples: a machine in a factory, a tractor on a farm, or a computer used for designing products are capital goods because they help produce other goods or services. A loaf of bread, a shirt or a mobile phone used for personal entertainment are consumer goods because they directly satisfy wants. This comparison makes it clear that the key property of capital goods is their role in production rather than direct consumption.

Why Other Options Are Wrong:
Option A is wrong because raising financial capital usually involves issuing shares or bonds, not using physical goods. Option C is wrong because it describes consumer goods. Option D is wrong because multiple uses is not an essential feature that distinguishes capital goods from other goods.

Common Pitfalls:
Students sometimes confuse capital goods with financial capital or capital gains. Capital gains refer to profits made when selling an asset at a higher price than it was bought, which is different from the economic concept of capital goods. Keeping the distinction between physical tools of production and financial assets clear helps avoid such confusion.

Final Answer:
Capital goods are goods that are used for Helping in the further production of other goods and services.