177k views
0 votes
In the circular-flow diagram, which of the following is not a factor of production?

a. Capital
b. Money
c. Labor
d. Land

User Rahul Jat
by
8.1k points

1 Answer

3 votes

Final answer:

In a circular-flow diagram, the factors of production are land, labor, and capital; however, money is not a factor of production as it's a medium of exchange.

Step-by-step explanation:

In the circular-flow diagram, which is a visual representation of how different sectors of the economy interact, there are various factors of production. The factors of production include land, which encompasses natural resources, labor, referring to human efforts used in production, and capital, which covers tools and machinery used for producing other goods and services. However, money does not count as a factor of production because it doesn't directly produce goods or services but rather serves as a medium of exchange to facilitate transactions.

User Astha Garg
by
7.5k points