Nature and Purpose of Business Test - 2

Natural Causes: Risks which arise due to the actions of Nature (and hence uncontrollable) are called natural risks. For example, risk of rainfall not occurring on time or excessive rainfall causing flood is a serious risk for farmers.

Economic activities are related to production, distribution, exchange and consumption of goods and services(profession). Professionals involved in their profession to make money or earn their livelihood, hence it is an economic activity.

Main Causes of Business Risk, Natural Causes,Human Causes,Competition,use of modern technology,government policies.

Business risk is the possibilities a company will have lower than anticipated profits or experience a loss rather than taking a profit. Business risk is influenced by numerous factors, including sales volume, per-unit price, input costs, competition, and the overall economic climate and government regulations. Good management means taking proper decisions avoiding risk.

Auxiliaries to trade or aids to trade also provide necessary support to trade. Such as transport, warehousing, banking and finance, and insurance. Mining is primary industry.

Making money is the purpose of any economic activity and to reach higher goals /target in the amount earned is the continuous process. Economic activities create economic or financial gain by producing goods or services.

Economic activities are related to production, distribution, exchange and consumption of goods and services. The primary aim of the economic activity is the production of goods and services with a view to make them available to consumer. Since earning profit is the major objective of business, it is an economic activity.

Business refers purchase and sales of goods with objective of earning profit. Business activity is an economic activity because it is related with money. Business is an economic activity.

Employment provides salary and an opportunity to earn livelihood. Making money is the purpose of any economic activity and to reach higher goals /target in the amount earned is the continuous process.

Economic causes relate to fluctuations in demand and price or changes in the market condition. There may be loss because of price fluctuations, trade cycle, severe competition and unforeseen changes in the techniques of production.