Introductory Macroeconomics

Book: Introductory Macroeconomics

Chapter: 2. National Income Accounting

Subject: Social Science - Class 12th

Q. No. 1 of Exercises

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What are the four factors of production and what are the remunerations to each of these called?

The four factors of production are –

a) Land - It is the gift of nature and it is called natural, original or primary factor of production.

b) Labour - It is a person engaged in some physical work, it is called human factor of production.

c) Capital - It means wealth, money or income which is invested in business, it helps in production function.

d) Entrepreneur - It is the work of an entrepreneur to bring the required factors together and work harmoniously.

The remuneration paid to each of these factors are –

Rent for land

Wages and salaries for labour

Interest for capital and

Profit for entrepreneur


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