Business Questions and Answers

Start Your Free Trial

What is the role of business in the economy?

Expert Answers info

Phillip Holland eNotes educator | Certified Educator

calendarEducator since 2016

write1,846 answers

starTop subjects are History, Literature, and Social Sciences

Business employs people within an economy. Without jobs, people cannot purchase goods and services. People employed in businesses also create goods and services for others to purchase. Sometimes this can include selling directly to the consumer, such as a hamburger chain selling food to a patron. Other times, businesses can sell to other businesses, such as when wholesalers sell goods out of a warehouse to grocery stores. All of these businesses operate under the laws of supply and demand where businesses compete by a combination of offering superior products and lower prices.

Business also drives the economy through investment. People looking to build wealth over time or to generate a stream of income from dividends choose to invest in businesses. Businesses encourage investment by keeping their profit margins large and their cost of doing business low. By doing this or even demonstrating the potential to do these two things, businesses help drive the economy by encouraging investment.

These aspects of business are true of a market economy, an economy driven by people's free choice to produce and consume.

check Approved by eNotes Editorial

pohnpei397 eNotes educator | Certified Educator

calendarEducator since 2009

write35,413 answers

starTop subjects are History, Literature, and Social Sciences

In any market economy, business plays a huge role.  Business is the engine of an economy.  Business provides jobs that allow people to make money and goods and services that people can buy with the money they make.  Without business, the economy would be very inefficient and/or very primitive.

In any economy, people need jobs.  In any but the most primitive economies, people need to be able to buy goods and services.  Businesses provide for both of these needs.  Most businesses provide people with...

(The entire section contains 2 answers and 541 words.)

Unlock This Answer Now

Further Reading:

check Approved by eNotes Editorial

learjet2 | Student



The most important role of any business, in a country's economy is job creation. The diginity of work empowers every citizen to know that they are able to provide for their family today, and in the future.

When people are not able to provide for their family, a country is at great risk for political instability because they don't have anything to lose.

Business also produces the necessary goods and services that people both in that country and in other countries need, providing even greater financial stability globally through international trading.

Anyone can learn how to take their great idea and turn it into a sustainable business, that may one day raise the standard of living around the world.