I`Ll Essay

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Chapter 19, Section 1 Economic Resources I. Producing Goods and Services (pages 424–426) A. Economic output includes goods, or tangible products, and services—work performed for someone else. B. Four factors of production are needed to produce goods and services: natural resources, labor, capital, and entrepreneurs. C. Natural resources are all the gifts of nature that make production possible, such as land, rain, forests, and minerals. D. Labor is the nation’s workforce or human resources. It includes the physical and mental talents of the people who help produce goods and services. Factors such as population growth, education, and war affect the quantity and quality of labor. E. Capital, or capital goods, includes the tools, machinery, and buildings used to make other products. Capital goods are unique because they are themselves produced. Consumer goods satisfy wants directly; capital goods do so indirectly by aiding production of consumer goods. F. Entrepreneurs are individuals who start new businesses, introduce new products, and improve management techniques. They are innovative and willing to take risks. They drive the economy because they use factors of production to produce new products. II. Gross Domestic Product (pages 426–427) A. Gross Domestic Product (GDP) is a measure of the size of the economy. It is the total value, in dollars, of all final goods and services produced in the country during a single year. Final goods are goods sold to their users. B. GDP does not count intermediate goods, which are components of final goods. It also does not count the sale of used goods, which do not represent new production. C. GDP is expressed in terms of money. This enables us to compare the relative worth of goods and services, which is more meaningful than simply numbers of products. D. To compute GDP, identify all goods and

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