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Part-I- 1) The Nature of Economic System.
1) What is a business?
Business is an economic activity. An economic activity is the task of adjusting the
means (resources)to ends (targets) or the ends to means.
Since business is an economic activity, the business firm is an economic unit and the
business decision making is an economic process, it is the economic environment of
business which is a relevant consideration in evaluating business policy-business strategy
and business tactics – of any corporate entity in any economy.
i) Economic conditions
ii) Economic policies
iii) Economic system.
ii) Economic policies – Fiscal policy, income policy, monetary policy, Exim policy,
taxation, savings investment policies etc.
iii) Economics system – An Economic system is the sum of total of economic activities
initiated by private sector or government or both.
There are three economic systems existing in the world:-
3) Profit motive.
c) Mixed Economy:-
When the firms take eco-decisions they should take into consider the economic and
non-economic environment existing in the economic system to get a feasible business
decision.