Factors of Production, Economic Activity, and Exchange
Factors of Production
Resources, also known as factors of production, are inputs used in the production of goods and services. The three primary factors of production are land, labor, and capital, with some economists including entrepreneurship as a fourth factor.
Land
Land encompasses not only farmland but also all natural resources from the ground and sea, such as minerals.
Labor
Labor refers to the physical and intellectual capabilities of human beings involved in the production process. Workers transform
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Business Cycle Phases
The business cycle consists of several phases:
- Boom (Expansion): A period of rapid economic growth.
- Contraction/Recession: A period of economic decline.
- Depression: A prolonged and severe recession.
- Crisis: A sharp downturn in economic activity.
These phases are influenced by factors such as aggregate demand.
Understanding Inflation
Inflation is defined as a continuous and widespread increase in the price level from one period to another. This means that the prices of most goods and
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Double Entry vs. Single Entry System
Q9: What is the Double Entry System? What are the differences between Double Entry and Single Entry systems?
Answer:
Double Entry System: The accounting system under which both aspects (debit and credit) of a transaction are recorded in the books of accounts is called the Double Entry System. This is considered the most comprehensive and scientific system of accounting.
Key Differences
Single Entry System
- Only cash accounts and personal accounts are maintained. Therefore,
International Trade: GATT, WTO, and Effects
Unit 4 – The World Trade System
1. International Trade: History of the Regulatory Framework of International Trade: GATT and WTO
1.1 The GATT
After the stock market crash of 1929, governments, lacking mutual trust, implemented protectionist measures to restrict imports. Consequently, trade experienced a 66% reduction in the following four years.
In 1948, 23 countries approved the General Agreement on Tariffs and Trade (GATT) at the Conference on Trade and Employment in Havana, following the agreement
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Equity and Resource Distribution
When it comes to more than two people, the meaning of the word equity is even more complex. The Rawlsian viewpoint emphasizes that an egalitarian distribution of resources can eliminate the incentive for most people to engage in productive endeavors, as they lose the wealth obtained as a result of taxes. This vision permits disparities that improve the welfare of the worst-off person in society. According to Rawls, a more equitable allocation of utility maximizes
Economics and Managerial Economics: Demand Analysis
Economics Vs. Managerial Economics
Here’s a comparison between Economics and Managerial Economics:
Economics
- Deals with both micro and macro aspects.
- Both positive and normative science.
- Deals with theoretical aspects.
- Studies both the firm and the individual.
- Wide scope.
Managerial Economics
- Deals only with micro aspects.
- Only a normative science.
- Deals with practical aspects.
- Studies the problems of the firm only.
- Narrow scope.
Demand Analysis
Demand analysis is an attempt to determine the factors affecting
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