Economics Flashcards
Factors of production
The elements necessary to produce goods and services. They can be divided into: Land Labour Capitol Enterprise
Economics
Is the study of how people and business with limited income make decisions about what they spend there money on.
Land
The natural resource available in a country
Labour
The people available in the country and their qualification and skill
Capitol
All man made things that are available to help produce goods and services
Enterprise
This is the act of putting together Land, Labour and Capitol to set up a business to make a product/service at a profit
Income from land
Rent
Income from labour
Salary/wage
Income from Capitol
Re-sale, rent, interest
Income from enterprise
Profit
Economic growth
Economic growth refers to the change in the quantity of goods and services on a country from one year to the next ( gross national production )
Benefits of economic growth
New jobs are created
People enjoy a higher standard of living
Money is available to the government
Inflation
An increase in prices in a country from one year to the next is referred to as inflation
Economic system
The way in which a country uses it’s factors of production to produce goods and services is referred to as the economic system in a country
Causes of economic growth
Low inflation
Low interest rates
Increase exports
