Questions: In economics, the term capital refers to A. financial resources used by businesses to hire resources. B. the process of raising funds through the sale of stocks and bonds. C. the difference between a firm's assets and its liabilities. D. physical capital, such as machinery, that is used to produce other goods.

The answer is D: physical capital, such as machinery, that is used to produce other goods.

Explanation for each option:

A. Financial resources used by businesses to hire resources - This option is incorrect because financial resources are typically referred to as "financial capital," which is different from the economic concept of capital that involves physical assets used in production.

B. The process of raising funds through the sale of stocks and bonds - This option is incorrect as it describes financial activities related to capital markets, not the economic definition of capital itself.

C. The difference between a firm's assets and its liabilities - This option is incorrect because it describes "equity" or "net worth," not capital. Capital in economics refers to physical assets used in production.

D. Physical capital, such as machinery, that is used to produce other goods - This option is correct. In economics, capital refers to physical assets like machinery, buildings, and equipment that are used in the production of goods and services. These assets are essential for creating value and facilitating production processes.