This section is from the book "Introduction To Economics", by Frank O'Hara. Also available from Amazon: Introduction To Economics.
In the example given in the preceding paragraph the machines which contribute their uses over a considerable period of time are called fixed capital goods, and the raw material which is used up at once and reappears in another form in the product is called circulating capital goods. The terms fixed capital and circulating capital are also used. The difference between fixed capital and circulating capital is one of degree rather than of kind, since both are consumed and the only difference is that one is consumed more rapidly than the other. A machine or a tool which is worn out in a month or two is circulating capital as compared with a factory building which lasts for half a century. On the other hand, as compared with coal, which is used up in a single application, the machine is relatively fixed capital.
 
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