Which of the following is most directly affected by the factors of production?

• A. The level of consumer preferences
• B. The rate of inflation
• C. The structure of government
• D. The quantity of goods and services produced

Answer: (D)

Verified step by step guidance

1. Understand the concept of factors of production, which include land, labor, capital, and entrepreneurship. These are the inputs used to produce goods and services.
2. Recognize that the quantity of goods and services produced depends directly on the availability and efficiency of these factors of production.
3. Analyze why other options like consumer preferences, rate of inflation, and government structure are not directly affected by factors of production. For example, consumer preferences relate to demand, inflation relates to price levels, and government structure relates to political organization.
4. Conclude that since factors of production are the resources used in production, they most directly affect the quantity of goods and services produced.
5. Therefore, the correct answer is the quantity of goods and services produced, as it is the output resulting from the combination and use of factors of production.