Factors of production

Land means natural resources not created by human efforts.

Labour means human resources or people with all their efforts and abilities.

In economic theory "labour" is any work undertaken in return for a fixed payment, i. e. the price for the use of labour. Money is a means of measuring the value of men's labour.

"National labour force" is all those people who are available for work within the nation, that is the working population. Since the size of labour force is related to total population, the number of people available for productive activity varies as the population changes. So, labour is a productive resource that may vary in size over time.

Labour can be mental and physical.

There are four major categories of labour.These categories are unskilled, semiskilled, skilled and professional or managerial.

Workers who do not have the training to operate machines and equipment fall into the category of unskilled labour. Most of these people work chiefly with their hands at such jobs as digging ditches, picking fruit, etc.

Workers who have mechanical abilities to operate any not very complex equipment fall into the category of semiskilled labour.

Workers who are able to operate complex equipment and can do their tasks with little supervision fall into the category of skilled labour.

Workers with high level skills fall into the category of professional labour. Examples are doctors, lawyers and executives of large companies.

Capital means man-made resources.

Taxation

The principlal purpose of taxes is to pay for the cost of government. Taxes are paid by people.

Most people would agree that some taxation is necessary, but the question of which taxes and in what amounts, can lead to considerable disagreement.

Most taxes can be classified as progressive, regressive and proportional.

A progressive tax takes a larger percentage of a higher income and a smaller percentage of a lower income.

A regressive tax is one that takes a higher percentage of a tow income and a lower percentage of a high income.

A proportional tax. takes the same percentage of all incomes, regardless of size.

A sales tax is a general tax levied on consumer purchases of nearly ail products. Sales taxes are collected by individual merchants at the time of the sale and are turned over weekly or monthly to the proper government agency.

Much of the government's revenue comes from tire income and property taxes.

The properly tax is a tax on real property and tangible and intangible personal property. Real property includes land, buildings and anything else permanently attached to them. Tangible property is tangible items of wealth not permanently attached to land or buildings. Intangible persona! property Includes shares, bonds, mortgages and bank accounts.

In order to have an effective tax system, government must have criteria or standards.

One such criterion is that a tax yields enough revenue. A second criterion is clarity. A third criterion is ease of administration This criterion also includes convenience and efficiency. A final criterion is fairness.

MONEY

Money can be defined by what money does.

"Currency" is money that is actually in use in a particular country, while "money" is coins and printed notes given and accepted when selling and buying.

All values in the economic system are measured in terms of money. Goods and sevices are sold for money, and that money is in return exchanged for other goods and services.

Money can be any substance that functions as a Medium of Exchange, a Measure of Value and a Store of Value.

As a Medium of exchange, money is something generally accepted as payment for goods and services.

As a Measure of Value money expresses worth in terms that most individuals understand.

Money also serves as a Store of Value. This means that goods or services can be converted into money that is easily stored until some future time.

Modem money has several characterictics: portability, durability and divisibility.

Modern money, however, has a certain disadvantage. The value of money or the purchasing power of money is not stable, it can change.

An extended period of rising prisec is called infliation. A period in which prices are falling is called defliation. The value of money decreased during periods of inflation. And increased during periods of defliation.