Economy plays a major role within our society. People constantly find themselves facing scarcity; therefore, they have to make choices in order to satisfy their needs and wants.
The lifestyle that people have emphasize in their gross income that they receive from a business they either work or own. It is a creative and competitive activity that continuously contributes to the shaping of our society. Businesses are very important because they provide goods and services for consumers, but also improve the economy and increase jobs for people within society, which is an additional fact producing a higher standard of living. If we would like to measure our societies standard of living, we must look at our Gross Domestic Product, which is the complete measure of our nations output.
Unfortunately, inflation is a major problem in our nation, which often reduces the GDP. Inflation occurs when the goods become too high within society and spending decreases. A central function within our economic system is satisfying the needs of the consumers with the use of limited supplies and making sure that those supplies are of high quality.
Individuals, Firm, and Government must make decisions and these choices basically answer three questions What?, How?, and Who?. All economic systems begin with the same resources land, labor, capital, and entrepreneurship. Land is natural resources example other than land are minerals, oil, gas, and water. Labor is the human effort where individuals use their physical and mental efforts. Capital it could either be physical capital which are machines, buildings, equipment, roads, computers, trucks; and human capital that are the knowledge and skills individuals acquires through education and experience. Entrepreneur is the effort used to coordinate the production and sale of goods and services. The purpose of society is to combine these resources in a way that will make them more valuable.