2026 US History Terra Nova Practice Test – Complete Prep Guide

Factories are a form of capital because they are physical assets used to produce goods. In economics, capital refers to man-made tools and facilities—like buildings, machines, and equipment—that help turn inputs into outputs. This distinguishes them from labor (the workers), land (natural resources), and entrepreneurship (the risk-taking and management needed to organize production). So a factory fits squarely under capital, as a durable asset that enables production.