GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Loan from the bank
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Stock or produce
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Factory building
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Factory workers
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Detailed explanation-1: -Money is not considered as a factor of production. Money is medium of exchange and hence it cannot help to increase the productivity of an economy like other factors of production, thus the factors of production are Land, Labour, Capital and Entrepreneurship.
Detailed explanation-2: -Money is not capital as economists define capital because it is not a productive resource. While money can be used to buy capital, it is the capital good (things such as machinery and tools) that is used to produce goods and services.
Detailed explanation-3: -The factors of production are the inputs used to produce a good or service in order to produce income. Economists define four factors of production: land, labor, capital and entrepreneurship. These can be considered the building blocks of an economy.
Detailed explanation-4: -Capital comprises one of the four major factors of production, the others being land, labor, and entrepreneurship. Common examples of capital include hammers, tractors, assembly belts, computers, trucks, and railroads.