Economics AS question

The incomes of factors of production in a closed economy are made up of:
Rent = £10m
Wages = £60m
Intrest= £15m
Profit = £25m
Please could you answer/explain this

'Explain why planned increase in investment of £10m will lead to disequilibrium of the economy'

(edited 9 years ago)

Reply 1

TSR Jessica

Sorry you've not had any responses about this. :frown:

Are you sure you’ve posted in the right place? Posting in the specific Study Help forum should help get more responses. :redface:

Hopefully someone will be able to get back to you :h:

Reply 2

BC95

Original post by nayana71

Hey there,

This question is very ambiguous, however, I will have a go at answering it.

An increase in investment in a factor of production, will improve the quantity or quality of the factor.

This means productivity will rise, costs of production will fall and the supply curve will shift outwards.

This will cause excess supply and thus disequilibrium.

Hope that helps :smile: