Today we will discuss the role of capital in the economy. Next, the meaning of this term will be given. The conversation also touches on the importance of this phenomenon in the production of services and goods and in a market economy.
Definition
So, now we will talk in detail about what capital is. The definition of this term is the first thing you should pay special attention to. This phenomenon is called net assets. The term originates from the word capitalis (it is of Latin origin). This concept can be translated as "main".
Capital in the economy is a term that refers mainly to property. Net assets are also a group of goods that are used to make a profit and, as a result, to achieve wealth.
We give a narrower definition. According to him, capital in the economy is a source of profit, which takes the form of means of production. This definition is most fully disclosed in terms of net physical assets.
Specialists also allocate money capital. It is the sum of cash. With its help, physical capital is acquired. Money and material values are continuously invested in the economy of an individual state. This phenomenon is called investment. It is also defined as investment. Note that net assets are not consumed resources.
In science
Capital in the economy is the resources that are used in the provision of services or the manufacture of goods. In this case, the means of production plays a special role. It becomes physical capital. Means of production are assets only in combination with the owner of a certain labor force.
An example is a metal cutting machine. The unit itself is not able to bring any income to the owner. Equipment turns into part of its own funds when hiring a worker. It will be he who will control the machine. Also, the owner can rent the unit.
Physical assets appear in the economy when the owner of the funds finds labor. As a result, he employs a person to operate the equipment that is owned. Capital is not an object or thing. In fact, we are talking more about the production equivalent embodied in the facility. He is assigned specific characteristics.
Capital is an indispensable element of a market economy. This resource is necessary for production. Own funds include tangible assets, as well as property. Among them should be called raw materials for creating the final product, structures, equipment, assemblies. Capital is an economic resource generating income for the owner. Simplifying economic theory, own resources can be called all the resources that allow you to make a profit. Most often, the monetary equivalent is used to estimate the amount of capital. Using your own funds, you can create a business in order to subsequently receive profit and income.
Net assets are also used to increase production at an existing enterprise. The source of change and the emergence of capital are accumulations. They are of great importance.
Organization
You should also discuss “Russian capital” as a proper name. In this case, we are talking about a bank. It provides services to all categories of customers. Russian Capital Bank was established in 1993. It is part of the deposit insurance system. The organization is controlled by the Central Bank of the Russian Federation. Yu. O. Isaev is the chairman of the board of directors.
Registered capital
In this case, we will focus on companies. Different business entities have personal initial funds. They are called the authorized capital. It is formed thanks to the contributions of the founders of the company. The capital of the organization includes various assets. In particular, it may include funds allocated by local or state authorities; mutual contributions; investments of founders; stocks. Reserve and additional funds can also work and form.
Maternal capital
This is a certain form of assistance to families in which there are children. She comes from the state. Such financial support has been practiced in Russia since 2007. It is allocated to families who have two or more children. In this case, one of the parents is handed the appropriate certificate. Such a document allows you to receive state assistance. Funds are transferred only by bank transfer. Parents receive the right to manage the child’s money only after they reach the age of three. In special circumstances, you can obtain consent to the use of these funds immediately after the birth of the baby.
In conclusion, we can say that capital in the economy is its integral part and one of the main resources.