Economics: Branches, Divisions and the Factors of Production
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Economics: Branches, Divisions and the Factors of Production

Economics is the study that deals with how the people in society use scarce resources to be able to produce valuable commodities and on how they distribute these commodities among themselves. It can also be define as the study of the way how the resources, commodities or services are allocated or distributed in the different parts of society.

Economics is the study that deals with how the people in society use scarce resources to be able to produce valuable commodities and on how they distribute these commodities among themselves. It can also be define as the study of the way how the resources, commodities or services are allocated or distributed in the different parts of society.

There are two branches of Economics; the Macroeconomics and the Microeconomics.

The Macroeconomics is concern about the general aspect of economics or the entire economy itself. It is concerned about the countries economy as a whole such as on dealing with the countries level of production, the unemployment rate, the gross national product and more.

The Microeconomics is concern about the individual or basic unit of the economy. It deals about the specific segment of the economy such as the consumers, the prices of commodities and others.

There are several divisions of economics; the production, the consumption, the distribution, the exchange, and the public finance.

Production is the way in which the people manufacture different product or goods out from raw materials. These products or goods are the things that are necessary to satisfy the needs of the people in the society.

The Consumption is a way in which peoples in society utilize or consume the products or goods that were produce during the production process.

The Distribution is a way in which the product and goods are distributed or marketed to the different parts or economic outlets of society for the allocation and consumption of the individual consumers.

The Exchange is the process by which the goods, the products or the services are transferred from one person to other in exchange of something valuable usually in the form of money.

The Public Finance is the process by which the government or the state is involve in different financial activities such as the taxation, borrowing and other else

There are different factors of Production in Economics; the Land, the Labor, the Capital, the Entrepreneur and the Foreign Exchange.

The Land refers to the natural resources in which the raw materials in the production process are acquired.

The Labor refers to the manpower that is needed in order to produce valuable products by utilizing the raw materials available.

The Capital refers to the amount of money as well as the manmade equipments such as tools, machine and factory that are used in order to utilize raw materials and labor for the production process.

The Entrepreneur refers to the individual that organizes the land, the labor and the capital and initiates the production process.

The Foreign Exchange refers to the foreign currency reserve which is used in importing raw materials or goods and services that are needed for the production processes.

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Comments (3)

Thanks for sharing..voted

Useful info. Very detailed and well-composed write-up. Voted

BTW...article takes me back to when I was in college. Thanks for refresher course LOL

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