Glossary Terms:

Capital Chips (Part 3)

Glossary terms from:


Any activity or organization that produces or exchanges goods or services for a profit.


Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.


Decision made or course of action taken when faced with a set of alternatives.


People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.


The study of how people, firms and societies choose to allocate scarce resources with alternative uses.


Tangible objects that satisfy economic wants.


A new idea or method.


Someone who creates or devises a new process, application, machine, or article of application.


The process of putting money someplace with the intention of making a financial gain. Investment possibilities include stocks, bonds, mutual funds, real estate, and other financial instruments or ventures.


The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.


A good or service that can be used to satisfy a want.


A process of manufacturing, growing, designing, or otherwise using productive resources to create goods or services used to to satisfy a want.

Productive Resources

Natural resources, human resources, capital resources and entrepreneurship used to make goods and services.


The amount of output (goods and services) produced per unit of input (productive resources) used.


The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

Standard of Living

The level of subsistence of a nation, social class or individual with reference to the adequacy of necessities and comforts of daily life.


People employed to do work, producing goods and services.