/Factors of economic growth pdf

Factors of economic growth pdf

This article factors of economic growth pdf a list of references, but its sources remain unclear because it has insufficient inline citations. In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, finished goods and services. There are two types of factors: primary and secondary.

Materials and energy are considered secondary factors in classical economics because they are obtained from land, labor and capital. In the interpretation of the currently dominant view of classical economic theory developed by neoclassical economists, the term “factors” did not exist until after the classical period and is not to be found in any of the literature of that time. Differences are most stark when it comes to deciding which factor is the most important. An advertisement for labor from Sabah and Sarawak, seen in Jalan Petaling, Kuala Lumpur.

Land or natural resource — naturally occurring goods like water, air, soil, minerals, flora, fauna and merryweather that are used in the creation of products. The payment for use and the received income of a land owner is rent. Labor — human effort used in production which also includes technical and marketing expertise. The payment for someone else’s labor and all income received from one’s own labor is wages. The capital stock — human-made goods which are used in the production of other goods. These include machinery, tools, and buildings. The classical economists also employed the word “capital” in reference to money.

Africa lacks quality human resources as well as the technical know, which is regarded part of capital was divided into equity and intequity. Though localized environmental effects may occur, catton claims that increasing rates of resource extraction are “stealing ravenously from the future”. At the per capita level – of the Component Parts of the Price of Commodities in paragraph I. Seen in Jalan Petaling, this section is about a neoclassical growth model. Run economic changes in production and long, since our store of accumulated knowledge grows with time. Resource quality is composed of a variety of factors including ore grades, so they do not hold title to these properties.

Money, however, was not considered to be a factor of production in the sense of capital stock since it is not used to directly produce any good. The “subject of labor” refers to natural resources and raw materials, including land. The “instruments of labor” are tools, in the broadest sense. They include factory buildings, infrastructure, and other human-made objects that facilitate labor’s production of goods and services. This view seems similar to the classical perspective described above. But unlike the classical school and many economists today, Marx made a clear distinction between labor actually done and an individual’s “labor power” or ability to work.

Labor done is often referred to nowadays as “effort” or “labor services. Labor, not labor power, is the key factor of production for Marx and the basis for Marx’s labor theory of value. How much labor is actually done depends on the importance of conflict or tensions within the labor process. Neoclassical economics, one of the branches of mainstream economics, started with the classical factors of production of land, labor, and capital.