Why Are the Four Factors of Production Important

question 17

Multiple Choice

Why are the four factors of production important?

• A) The factors of production are regulated by the government.
• B) Human resources will always be the most important factor of production.
• C) Managing all four of the factors of production is critical for the successful operation of a business.
• D) An economic system requires the factors of production for successful operation.

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Definitions:

Collection Float

The time gap between when a check is deposited and when funds are made available in the account, affecting the company's cash flow.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a basket of goods approach to find the relative values of the currencies.

Exchange Rates

The value of one currency expressed in terms of another currency, affecting international trade and investments.

Generalized Fisher Effect

A theory stating that the real interest rate is independent of monetary measures, with nominal interest rates adjusting to expected inflation.