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EXTERNAL TRADE
PART I
Foundations of Business
CHAPTER 1
Nature and Purpose of Business
LEARNING OBJECTIVES
After studying this chapter, you should be able to :
•
state the different types of economic activities;
•
explain the concept and characteristics of business;
•
analyse the objectives of business;
•
appreciate the role of profit in business;
•
explain the evolution of business activities in India.
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BUSINESS STUDIES
1.1 Introduction
All human beings, wherever they are,
require different types of goods and
services to satisfy their needs. One or
two members of every family have to
engage in some activities to earn money
and provide for the needs of all
members. Thus, people pursue
different occupations to earn their
livelihood and, depending on their
income, have different standards of
living. In modern times, a large variety
of goods and services are available in
the market. Also there is increasing
demand for goods and services due to
the desire of people to raise their
standard of living. On the one hand,
people engage in different activities so
as to earn as much as possible and
fulfill their increasing needs. On the
other hand, the necessity of supplying
goods and services has led to certain
activities being undertaken by people
to produce and sell what are needed by
others. Thus, we find a large number
of people earning their livelihood as
agricultural labour, or working in
offices, factories or mines. At the same
time, there are people who produce and
sell goods and services so as to earn
income from these activities. Farmers
may produce agricultural crops to be
sold in the market. People set up
factories to produce goods which may
sold in retail shops. Trucks are
manufactured and used to carry goods
from one place to another. Supply of
electric power, gas and water is
arranged for use in factories as well as
for domestic consumption. The
purpose behind most of these activities
of human beings is earning money by
satisfying the increasing demand for
goods and services.
In this chapter, we shall f