Why is business so important to a country's economy?

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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Business is extremely important to a country’s economy because businesses provide both goods and services and jobs.  Businesses do these things much more efficiently than individuals could on their own.

Businesses are the means by which we get most of the goods and services that we, as consumers, want and need.  You will presumably be reading this answer on a computer that was produced by a business.  You are buying internet access from a business.  Almost everything that you use in your everyday life was produced by a business and sold by yet another business.  Without these businesses, it would be very hard for us to get the things we need.  Imagine, for example, how hard it would be for one person to build and sell their own computers from scratch.  This is a major reason why businesses are important for a country’s economy.

Businesses are also the means by which many people get their jobs.  Businesses create job opportunities because they need people to produce and sell their goods and services to consumers.  Without businesses, each individual would have to create his or her own way of making a living.  This would be very difficult.  Thus, businesses are important because they provide goods, services, and jobs.  Without these things, nations’ economies would be much smaller and weaker than they are.

nmungazi's profile pic

nmungazi | Student, Graduate | eNotes Newbie

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A business is defined in many ways but to make it simple in answering our question lets define it as a person's regular occupation, profession, or trade.A business often exist like an individual being who has goals some of the business goals are to make profit, to grow or expand , to survive, to expand its capacity.As business are formed they have the goals as illustrated before but in meeting these goals there end up giving a lot of advantages to the economy in which the are operating or even beyond.This makes businesses important to a country's economy .

Now lets look at these elements that makes businesses important to an country's economy.Before will look at the more general important issues lets us agree that business contributes to an a country's exchange rate.An exchange rate is the price of one currency in other foreign currency.If an economy has no or poor business activities it means that that economy is depending on imports so local citizens require more of foreign currency to meet their foreign expenditure on imports therefore the local currency loose strength.This implies that an economy with strong business players are capable of maintaining a strong economic exchange rate.

Businesses contributes to improve a countries international appeal by improving GDP of a country.A country with very productive businesses often has attractive international accounts as it has a high GDP.A high GDP often mean that a country has adequate provision of goods and services for citizens .

A country with business often improve the government treasury.Business in tells a taxable base for the government that is the government can tax business and provide for areas which can not be provided by private business for example national defense.

In meeting business goals such growth and increasing capacity or even starting business activities there is need for manpower this gives an economy significant advantages as businesses help to reduce unemployment as they employ people to provide workforce.This will also improve a nation's treasury as government can now tax more employed workforce.

In conclusion businesses are essential to an economy to survive.

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