Answer to Question #182013 in Microeconomics for kat

Question

Money is regarded as a factor of production. Do you agree with this statement? Support your answer with reasons.

Answer 1

Factors of production are the inputs that are included in the production of the goods and services. The examples of the factors of production are labor, machinery and the capital that is included in the process of production of the goods and services. 

Money is not regarded as a factor of production.

The money is not directly involved in the process of the production but is eases out or it facilitates the facilites the process of production by acting as a medium of exchange. The money is used to buy land, pay the wages to the labor and buy machinery and the money can be used various purposes but is not regarded as a factor of production.