The Business Environment



Business Environment

Role of Business in the Economy

Businesses played a significant contribution in the growth of the economy. Businesses are the backbone of the country's economy. Even small businesses have the equal importance in the economy. They provide employment for the people, and this cycle give a positive contribution in the over all country's growth. Business is especially important for the capitalist economy. They provide trading imports and exports in the country. Without businesses, there would be no trading possible in the economy. And there would be no connection with the global market. The profits of the business have a direct impact on the country's GDP. Increased GDP helps in economic development (Todaro, 2002). Business uses the country's resources and optimizes. Business brings new opportunities in the country. It produces goods and services in the country, and some of those good sent to the foreign market that increases the foreign exchange.

Profit and Non-Profit Organizations in the Economy

The main difference in the profit and non-profit organization are that the non-profit organizations work for the welfare of the society. They usually do not want to earn a profit for their services to the society. The non-profit organizations were not given crucial importance when studying the economics. However, non-profit organization plays significant impact in the economic analysis. Non-profit organization could be any where in the education sector, healthcare sector, and other social organizations. It has a huge impact on the growth of community. The profitable organization are direct related to the development of economics, whereas, the non-profitable organization contributes somewhat indirectly to the economy. The non profitable organization such as healthcare, education, and other social contribution help the community people who then work for the contribution of economic development. The profit organization earns money through the investors who earn a profit, and non-profit organization gets donations from public and government. The main benefit of the non-profit organization is they do not give taxes or any other legal liability, whereas, profit organization earns direct profit but pays taxes. Non profit organizations do not have legal ownership they have to select a director for their organization.

Impact of Fiscal Policy

Fiscal policy is the set of measures and tools to raise the revenues needed to carry out the role of the public sector. There could be a change in fiscal policy, when the state changes its programs to alter their spending or tax rates. The purpose ...