Why is the role of goods and services in an economy important?
Answers
Goods and services constitute the backbone of any economy.Without any goods and services,the entire economic machinery would stop functioning as these are the cardinal attributes that drive the entire economic mechanism of the world.
Explanation:
Goods and services are veritably considered as the cardinal or central components of the global economic mechanism.Without any goods and services in the global economy,all types and forms of economic activities would cease and the entire economic machinery in the world would consequently stop functioning.Without any goods and services,there would be no consumer demand as consumers or buyers constitute general people who need goods and services on a regular basis to survive or sustain their day to day lifestyle.Without any consumer demand or consumption,there would not be any requirement for production which will lead to the absolute shutdown of the various businesses and commercial activities leading to no capital or financial investments and employment in the global economy.Furthermore,without any production of goods and services,people or households will not any jobs or income and the GDP or National Income generation of the respective countries would stop.Without any business or commercial activities,all the commercial firms or companies would shut down and hence,all the productive resources or factor inputs would become completely idle.Therefore,the global economy would literally come to a standstill or lock-down.