Question

four Characteristics of Economic Activities​

Answer 1

Answer:

Characteristics of Economic Activities:

• Wealth Producing Activities:
• Satisfying Human Wants:
• Money Income:
• Developmental Activities:
• Proper Allocation of Resources:
• Optimum Use of Resources:

Answer 2

Answer:

1] Income Generation

• All economic activities will generate some form of income.
• It is not compulsory that such income is in monetary terms, it can be in different kinds.
• So, if the activity is a form of livelihood for the person, and it generates him any form of income then it is an economic activity.
• For example, a labourer who toils the land and gets paid in crops, this is an economic activity.

• So when you employ any one of the factors of production (land, capital, labour, entrepreneur) and in return earn an income in form of wages, salary, rent, royalty, profit, etc, we will classify such an activity as an economic activity. For example, rent earned on a property.

2] Productive in Nature

• If the activity is a means of livelihood it means it implies that there was some element of the production process involved.
• So an economic activity must be productive in nature, it must involve some aspect of the production of goods and/or services.

Let us see some examples. A worker in a factory is producing goods, a software engineer is providing services, a teacher also produces services. Similarly, farming is an economic activity as again it helps in production.

• One point to note is that even if the production is for self-consumption it is still a productive activity and so it is an economic activity.
• Because it will still add to the overall supply of the market. Also, all other activities like warehousing, transporting, etc which help bring the products to the market are also productive economic activities.

3] Consumption is also an Economic Activity

• Consumption is the demand side of the market.
• It is what generates the production and the supply of goods and services. The consumption of goods promotes competition and introduction of better products in the market.
• So consumption encourages production activities, so it is in itself an economic activity.

4] Savings, Investment, Wealth

• Savings is the income that is not spent.
• Such savings are invested in a variety of instruments such as savings account, term deposits, the stock market, mutual funds, real estate, gold, etc. So such investment turns to wealth.
• Then the private and public companies borrow such monies to invest in their business and further economic activities in the country.

Explanation: