What does the term 'capital' refer to in economics?

In economics, the term 'capital' specifically refers to man-made resources that are utilized in the production of goods and services. These resources can include machinery, tools, buildings, and equipment. Capital is a critical factor of production, alongside land and labor, and it contributes to increasing efficiency and output in the production process. By investing in capital, businesses can enhance their capacity to produce and improve their overall productivity, leading to economic growth.

Natural resources, while important for production, fall under a separate category known as 'land.' The financial wealth of individuals pertains more to their personal savings and investments rather than the productive resources necessary for creating goods and services. Government-owned assets may serve public welfare, but they aren't classified as capital in the economic sense unless they are specifically used for production purposes.