What term describes goods that are used in producing other goods?

The term that describes goods that are used in producing other goods is capital goods. Capital goods are tangible assets that a company uses in the process of manufacturing their products and services. These goods are not sold directly to consumers but instead assist in the production of goods that are ultimately sold to consumers. Examples of capital goods include machinery, tools, and buildings that are used over time to produce consumer products or services.

Consumer goods, on the other hand, are products that are ultimately purchased and used by consumers, rather than being utilized in the production of other items. Durable goods are a subset of consumer goods that have a longer lifespan, such as cars and appliances. Raw materials refer to the basic, unprocessed substances that are used to manufacture products but don't encompass the broader category of goods used in production as capital goods do. Therefore, identifying capital goods as the correct answer highlights their essential role in the production process, distinguishing them from consumer goods, durable goods, and raw materials.