. The process of converting factors of production in to final goods and services is known as
A) Investment
B) Consumption
C) Production
D) Resource
The correct answer is C) Production.
The process of converting factors of production into final goods and services is known as production. To arrive at this answer, we can look at the definitions and characteristics of each of the options and eliminate the ones that do not match.
Investment refers to the act of allocating money or resources with the expectation of generating a return in the future. While investment may be a part of the production process, it does not specifically refer to the conversion of factors of production into final goods and services, so we can eliminate option A.
Consumption refers to the use of goods and services by individuals and households to satisfy their needs and wants. Consumption comes after the production process, as it involves the utilization of the final goods and services produced. Therefore, consumption is not the correct answer, so we can eliminate option B.
Resource refers to the inputs or factors of production that are used in the production process. While resources are used in the production process, they are not involved in the actual conversion of factors of production into final goods and services. Therefore, we can eliminate option D.
This leaves us with the correct answer, which is C) Production. The production process involves combining the different factors of production, such as land, labor, capital, and entrepreneurship, to create final goods and services that are ready for consumption or use.