Another important distinction that we will make here, and in future chapters, is that financial capital (stocks, bonds, bank deposits, cash) is not an economic resource . Financial capital is simply a piece of paper that designates a claim of ownership. A piece of paper by itself produces nothing. In general, when we use the term capital in this course we do not mean financial capital. Capital (or real capital, or capital goods) refers to buildings, factories, equipment -- physical objects used by individuals and firms in production processes. Similarly, investment refers to the accumulation of real capital and not financial investment, such as the purchase of stocks or a government bond. Remember, this an economics and not a business or accounting class.