Macroeconomics: Principles, Problems, & Policies 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0-07766-077-3
ISBN 13: 978-0-07766-077-2

Chapter 1 - Limits, Alternatives and Choices - Discussion Questions: 8

Answer

Money is distinct from capital resources. Capital goods are directly used to produce goods, for example, carpentry tools are used to produce furniture. By contrast, money can not produce anything, unless it is invested in capital goods.

Work Step by Step

Entrepreneurial ability is its own category because it refers to the firm's skill in combining the other three factors of production - land, labour and capital - to produce goods efficiently and effectively. The major functions of the entrepreneur are: *to combine resources *to make business decisions *to create new, innovative products
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