What is more likely to reduce the supply of factors of production in an economy
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Answer:
ECONOMICS MACROECONOMICS
Why Are the Factors of Production Important to Economic Growth?
By
SEAN ROSS
Updated Jul 8, 2019
Economic growth only comes from increasing the quality and quantity of the factors of production, which consist of four broad types: land, labor, capital, and entrepreneurship. The factors of production are the resources used in creating or manufacturing a good or service in an economy.
Understanding the Factors of Production
The factors of production are what's needed for a company to earn an economic profit. The four factors of production are:
Land
The land is any natural resource that's needed or used in the production of a good or service. Land can also include any resource that comes from the land such as oil, gas, and other commodities such as copper and silver. Typically, land includes any natural resource that's used as raw materials in the production process.
Labor
Labor consists of the people that are responsible for the production of a good, including factory workers, managers, salespeople, and the engineers that designed the machinery used in production.
Capital
Capital refers to capital goods such as manufacturing plants, machinery, tools, or any equipment used in the production process. Capital might refer to a fleet of trucks or forklifts as well as heavy machinery.