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Macroeconomics 2nd Edition by Campbell McConnell ,Stanley Brue,Sean Flynn
Edition 2ISBN: 978-0077416409Macroeconomics 2nd Edition by Campbell McConnell ,Stanley Brue,Sean Flynn
Edition 2ISBN: 978-0077416409 Exercise 2
Why is money not considered to be a capital resource in economics? Why is entrepreneurial ability considered a category of economic resource, distinct from labor? What are the major functions of the entrepreneur?
Explanation
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Money is not considered as a capital resource in economics because the term "capital" mainly refers to tools, machinery, and other productive equipment. Money in economics means the medium of exchange for purchasing goods and services and which has store of value.
Entrepreneurial ability includes the use of all economic resources such as land, labor and capital for producing goods services, which are consumed by the people of the economy. Thus, entrepreneurial ability is considered as a part of economic resource, distinct from labor.
The major functions of entrepreneur are:
• The entrepreneurs take initiatives in combining the resources of land, labor and capital to produce a good or a service.
• They make the strategic business decisions.
• They innovate new ideas for producing goods services.
• They bear risk.
Entrepreneurial ability includes the use of all economic resources such as land, labor and capital for producing goods services, which are consumed by the people of the economy. Thus, entrepreneurial ability is considered as a part of economic resource, distinct from labor.
The major functions of entrepreneur are:
• The entrepreneurs take initiatives in combining the resources of land, labor and capital to produce a good or a service.
• They make the strategic business decisions.
• They innovate new ideas for producing goods services.
• They bear risk.
Macroeconomics 2nd Edition by Campbell McConnell ,Stanley Brue,Sean Flynn
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