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Flashcards in How does the economy works? Deck (11):

How else is the country generates income?

1) Imports
2) Tourism
3) Taxation


Factors of Production

1) Capital
2) Enterprise
3) Land
4) Labour


2 Problems with "land" that might stop you from improving everyone's standard of living

1) Temperature
2) Quality of land - the resources you find on the land (food, animals) and underneath (oil, coal, gas)
3) Not every country have same amount of resources


2 UK issues with "Labour" that stop them being as productive as they could be

1) Ageing population
2) Shortage of skills


4 ways to make "labour" more productive and create economic growth

1) Education
2) Training
3) Health
4) Immigration


What is "Capital"

Describe money that is used to set up a business and keep it going


Capital can come from

1) Savings that are put into shares
2) Money that banks or very rich people lend to companies as loans


Factors that effect how much capital is available in an economy

1) Interest rate - currently low to encourage economic activity
2) Exchange rate - (currency)


What is "Enterprise"?

Person who takes risk, organises the land, labour and capiral


Why do prices rise?

1) Inflation
2) Availability
3) Interest rate -eg Bread/ house price


Define "inflation"

A sustained increase in the cost of living or the average/ general price level leading to a fail in the purchasing power of money