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Intro To Economics
Chapter 15
| Term | Definition |
|---|---|
| Economics | The study of how people and businesses with limited income make decisions about what they spend their money on. |
| Factors of Production | the elements necessary to produce goods and services. They can be divided into four categories: land, labour, capital, enterprise |
| Land | refers to all the natural resources available in a country that can be used to produce goods/services eg. agrigculture land, seas rivers and lakes, mines and forests. Land yields rent |
| Labour | refers to all the people available in a country to help produce goods and services and to the qualifications and services they may have. Labour receives wages. |
| Capital | refers to all the man-made things that are available to help produce goods and services eg. machinery, vehicles, buildings and equipment. Capital earns interest. |
| Enterprise | the act of bringing together land, labour and capital to set up a business to produce a product or supply a service at profit. Enterprise makes profit. |
| Economic System | The way a country uses its factors of production to produce goods and services is referred to as the economic system of the country. |
| Economic Growth | refers to the change in the quantity of goods and services produced in a country from one year to the next. |
| Inflation | an increase in prices in a country from one period to the next is referred to as inflation. |
| Gross National Product | The total amount of goods and services produced in a country in one year. |
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