The paper "General Business Issues" is a perfect example of a business assignment. The factors of production refer to the inputs required to manufacture goods and services. These factors of production are land, labor, capital and entrepreneurship. The factors of production are also classified into 4Ms; materials, machines, men and money. The goods and services manufactured by using these inputs are sold to consumers to generate profit. Experts aver that information resources should be considered as the fifth factor of production. The importance of each of these factors depends on the nature of the product being manufactured.
Skilled labor is important in the service sector while capital is important to set up a technologically advanced production plant. In the ultimate analysis, entrepreneurship appears to be the most important factor of production as the entrepreneur decides the quantum of other factors and is also responsible for organizing them. Answer 2A demand curve depicts the quantity of a product demanded at different prices. On the other hand, the supply curve depicts the quantity of a product supplied at different prices. There is an inverse relationship between price and quantity demanded.
When price decreases, demand increase. The demand curve is therefore downward sloping. The price and quantity supplied however move in the same direction. When price decreases, supply also decreases. The supply curve is therefore upward sloping. The point at which the demand curve and supply curve intersect is called the equilibrium price. The quantity of goods supplied is equal to the number of goods demanded at the equilibrium price. Answer 3Gross Domestic Product (GDP) refers to the monetary value of all goods and services produced in a country.
When GDP is adjusted for inflation and is expressed in base-year prices, it is called Real GDP. GDP and Real GDP are measures of the performance of an economy. Answer 4A moderate level of inflation is good as it signifies economic growth. Too much inflation however decreases the purchasing power of money and thereby reduces the standard of living of people. The government tries to control inflation through monetary policy tools like increasing or decreasing interest rates and changing the number of bank reserves.