What is the primary characteristic of capital goods?

The primary characteristic of capital goods is that they are utilized to produce other goods or services. Capital goods are assets used by businesses to manufacture products or provide services, playing a crucial role in the production process. They include machinery, tools, buildings, and equipment that aid in the creation of finished products or in delivering services to consumers.

This characteristic sets capital goods apart from consumer goods, which are intended for personal consumption. Capital goods are not consumed immediately; rather, they are used over a longer period to enhance productivity. Additionally, capital goods are often significant investments for businesses, typically being more expensive and durable compared to low-quality goods, which are not designed for production purposes. Hence, the correct response accurately reflects the role and function of capital goods in the economy.