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Question
Justify the following statement.
Business is part of economic activities.
Solution
- Economic activities are those activities which are done with the intention of making money.
- A person has to earn money for his livelihood.
- However, all economic activities are not the same. They can be conducted mainly in three different ways.
(a) Employment
(b) Profession and
(c) Business. - Business is conducted to earn a profit.
- A businessman invests his own capital, takes decisions, and carries out business activities.
- He also takes the risk of carrying business activities.
- Business operations boost the economy by producing products and services, creating jobs, and raising tax money. It boosts economic growth and development.
- Businesses innovate by upgrading products and services to fulfil consumer needs. Competition among firms offers consumers better products and more options at competitive rates.
- Businesses create money for owners and shareholders and contribute to society. Many companies assist community welfare, environmental sustainability, and social causes through corporate social responsibility (CSR), improving society.
- Thus, a businessman is responsible for business activities. The profit earned is enjoyed by a businessman. So business is a part of economic activity.
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