Discuss the factors that influence the supply of a product or service to the market.
The main factor in supply is the price of goods, which is associated with the law of supply. Moreover, several other factors are commonly referred to as non-price supply factors. These include the level of technology development, the price of resources, the amount of taxes, the number of producers, the size of the market, the availability of related products, and the expectations of producers.
Explain what you understand by factors of production, and discuss the factor input costs that firms should seek to control.
Factors of production are economic resources involved in producing goods and services. There are five factors of production: labor, land, capital, entrepreneurship, and information. In turn, production costs are the costs associated with the production and circulation of goods produced. They include material costs, depreciation, labor costs, interest on loans, and costs associated with promoting the product to the market and selling it. The control of these costs is a factor in the growth of profits and profitability of production.
What steps can a government take to try and control rampant inflation?
Methods of combating inflation can be direct and indirect. Indirect methods include regulation of the total amount of money through their management by the central bank and regulation of the lending and accounting process of commercial banks through their management by the central bank. In turn, direct methods include direct and direct regulation by the state of credits and thus the money supply, state regulation of prices, and state regulation of foreign trade, import and export of capital, and the exchange rate.
Is GDP a good indicator of economic growth for a country, or are there other indicators more relevant?
GDP is one of the critical indicators characterizing the development of any economy. While a country’s GDP allows economists to estimate the size of an economy, the method is often criticized for providing little information about living standards. GDP reflects the level of well-being only partially since it reflects only a person’s access to goods and services without considering health, education, the degree of inequality, and the protection of rights in the country.
Indicators of the level and quality of life are numerous. This is primarily life expectancy, the incidence of various diseases, the level of medical care, the state of affairs with personal security, education, social security, and the state of the natural environment. Equally important are indicators of the population’s purchasing power, working conditions, employment, and unemployment. The Human Development Index summarizes some of the most critical indicators.