The Factors Of Production And Their Rewards
HOW TO ENHANCE FACTORS OF PRODUCTION TO GROW AN ECONOMY
Vicky Michaella IRADUKUNDA
How to enhance the of production factors to grow an economy?
Factors of Production are an economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. The factors of production include land, labor, capital and entrepreneurship.
The capital is all of the tools and machinery used to produce a good or service. Land represents all natural resources, such as timber and gold, used in the production of a good. While labor is all of the work that laborers and workers perform at all levels of an organization, except for the entrepreneur. The entrepreneur is the individual who takes an idea and attempts to make an economic profit from it by combining all other factors of production.
Economic growth is the increase in the market value of the goods and services produced by an economy over time. It typically refers to the growth of potential output; therefore, since the factors of production are the inputs used for production, these lasts need to be enhanced in order to speed up economic growth.
Each economic factor of production has its rewards as follows:
Land is rewarded by rent
Capital rewarded by Interest
Entrepreneurship rewarded by Profit
Labor rewarded by wages, salaries
How to enhance the factors of production?
1. Land
Land is not created by mankind but it is a gift of nature. So, it is called a natural factor of production, it is also called a primary factor of production. Usually land means the surface of earth but in economics it has a wider meaning.It is all the materials and forces which nature gives freely for man’s aid in land, water, in air and light and heat. Land is the original sources of all material wealth. Therefore, the economic prosperity of a
Vicky Michaella IRADUKUNDA
How to enhance the of production factors to grow an economy?
Factors of Production are an economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. The factors of production include land, labor, capital and entrepreneurship.
The capital is all of the tools and machinery used to produce a good or service. Land represents all natural resources, such as timber and gold, used in the production of a good. While labor is all of the work that laborers and workers perform at all levels of an organization, except for the entrepreneur. The entrepreneur is the individual who takes an idea and attempts to make an economic profit from it by combining all other factors of production.
Economic growth is the increase in the market value of the goods and services produced by an economy over time. It typically refers to the growth of potential output; therefore, since the factors of production are the inputs used for production, these lasts need to be enhanced in order to speed up economic growth.
Each economic factor of production has its rewards as follows:
Land is rewarded by rent
Capital rewarded by Interest
Entrepreneurship rewarded by Profit
Labor rewarded by wages, salaries
How to enhance the factors of production?
1. Land
Land is not created by mankind but it is a gift of nature. So, it is called a natural factor of production, it is also called a primary factor of production. Usually land means the surface of earth but in economics it has a wider meaning.It is all the materials and forces which nature gives freely for man’s aid in land, water, in air and light and heat. Land is the original sources of all material wealth. Therefore, the economic prosperity of a