Factors of Production
Basic Economic Problem
Do not call money "capital". In economics they are not the same.
Capital is the physical productive asset used to make goods and services. Money is a medium of exchange: a means of paying for things. Money is not a factor of production.
A loan, a bank account balance and a pile of cash are all finance, not capital. The money may be used to buy capital, but the money itself is not a factor of production. There are only four factors: land, labour, capital and enterprise. Money is not a fifth factor.
Common exam question
Identifying a factor of production, and what capital is
Question: Match items to factors of production, or say what capital is (1 mark, multiple choice); or define a capital good with an example (2 marks).
Set in 3 of the 13 multiple-choice papers. Asked in 1 of the 11 structured papers. Land is what nature provides, including a crop such as wheat. Capital is anything people have made that is used to produce other goods or services, so a factory or a railway track is capital even though it stands on land. A finished product such as bread is not a factor at all. The wrong options beside capital have included the money invested in a firm (finance) and the ability to organise production (enterprise).
For the definition, one mark is for the meaning (a man-made good used to make other products) and one for an example such as a machine. The specimen mark scheme also wants capital goods picked out of a source, one mark each.