What is difference between Consumption goods and Capital goods?

Q3. What is the difference between Consumption goods and Capital goods?

Ans.

Basis Consumption Goods Capital Goods
Satisfaction of Human wants These goods satisfy human wants directly. So, such goods have direct demand. Such goods satisfy human wants indirectly. So, such goods have derived demand.
Production Capacity They do not promote production capacity. They help in raising producting capacity.
Expected Life Most of the consumption goods (except durable goods) have limited excepted life. Capital goods generally have an execpted life of more than one year.

 

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