Flow of Income Circular Flow of Income Essay

Question	Answer
Factors of Production	Land, Labour, Capital & Enterprise
Land	A countrys main resource inc. land rivers, seas, deserts, forests, minerals, metals, gas, oil, coal, water, weather, crops.
Renewalble	can be replaced by the environment over a short period of time e.g. forests.
Non-renewable	Cannot be replaced e.g. oil & coal
Labour	Human labour
Capital	Can be money or items used to produce goods or provide services e.g machinery, equipment, technology, tools.
Enterprise	Takes the risk by investing money to start a business in the hope of making a profit.
Economies of Scale	The more you produce, the cheaper the unit cost.
Economic System	The way a government organises it's countrys economy, how it controls the factors of production.
Free Economy	Citizens are free to make all decisions about the production of goods and services e.g. USA
Centrally Planned Economy	The Government makes all the decisions about economic activity e.g North Korea
Mixed Economy	A mixture of privatly owned and and state owned enterprises e.g. Ireland
Semi state / state sponsored	Businesses that are set up and funded by the government
Factors of Production	Land, Labour, Capital & Enterprise
Land	A countrys main resource inc. land rivers, seas, deserts, forests, minerals, metals, gas, oil, coal, water, weather, crops.
Renewalble	can be replaced by the environment over a short period of time e.g. forests.
Non-renewable	Cannot be replaced e.g. oil & coal
Labour	Human labour
Capital	Can be money or items used to produce goods or provide services e.g machinery, equipment, technology, tools.
Enterprise	Takes the risk by investing money to start a business in the hope of making a profit.
Economies of Scale	The more you produce, the cheaper the unit cost.
Economic System	The way a government organises it's countrys economy, how it controls the factors of production.
Free Economy	Citizens are free to make all decisions about the production of goods and services e.g. USA
Centrally Planned Economy	The Government makes all the decisions about economic activity e.g North Korea
Mixed Economy	A mixture of privatly owned and and state owned enterprises e.g. Ireland
Semi state / state sponsored	Businesses that are set up and funded by the government
Factors of Production	Land, Labour, Capital & Enterprise
Land	A countrys main resource inc. land rivers, seas, deserts, forests, minerals, metals, gas, oil, coal, water, weather, crops.
Renewalble	can be replaced by the environment over a short period of time e.g. forests.
Non-renewable	Cannot be replaced e.g. oil & coal
Labour	Human labour
Capital	Can be money or items used to produce goods or provide services e.g machinery, equipment, technology, tools.
Enterprise	Takes the risk by investing money to start a business in the hope of making a profit.
Economies of Scale	The more you produce, the cheaper the unit cost.
Economic System	The way a government organises it's countrys economy, how it controls the factors of production.
Free Economy	Citizens are free to make all decisions about the production of goods and services e.g. USA
Centrally Planned Economy	The Government makes all the decisions about economic activity e.g North Korea
Mixed Economy	A mixture of privatly owned and and state owned enterprises e.g. Ireland
Semi state / state sponsored	Businesses that are set up and funded by the government
Privatisation	The transfer of ownership and control of government or state assets or firms to private investigators e.g. Aer Lingus

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