Economic System

Set of Rules a nation uses to decide how it uses it's resource to staisfy.

Which Goods and Services will be Produced

A nation can only produce what its economic resources will allow it to produce. An economic resource is anything a nation could potentially use to produce or create goods and/or services.

Three Questions (Every Economic System)

1) Which goods and services will be produced?

2)How these goods and services will be produced?

3)How the goods and sevices will be distributed. (Who gets them?)

Factor of Production

When an economic resource is actually used to produce a good or service it becomes a factor of production.

The Four Factors of Production

There are four factors of production:

-Natural Resources

-Human Resources

-Capital Resources

-Entrepreneurial Resources