The Role of Business in the Economy
Milton Lawler, Ph.D.
Business 100 – Introduction to Business
February 22, 2013
What is the role of business in economic development? Some might say that business is the lifeblood of any economy. This is because businesses provide benefits to an economy in ways like job creation, the payment of a good portion of a region’s taxes, and the use of local resources. This cycle continues as the people employed by these businesses contribute to the economy by spending the money they earn, and the resources needed by a business further contribute to the economy by providing capital and employment to the vendors of these resources. Roles of For-Profit and Nonprofit Organizations in the Economy There are main categories of business: for-profit and nonprofit. The driving force behind a for-profit organization is revenue, while the goal of a nonprofit organization is to provide a service to the public. While there are many ways in which for-profit and not-for-profit organizations differ, there are also ways in which they are the same. Not-for-profit organizations are comparable to for-profit companies in that they employ workers, stimulate the economy by purchasing services and goods, make investments in the community, and provide goods and/or some type of service to the public. Another way in which nonprofit and for-profit organizations are the same is that they both need capital, expertise in some area, and a stable economy in which to prosper. For-profits differ from nonprofit organizations in that all of their labor is done by employees, while nonprofits mainly use volunteers. As well, nonprofits are often the recipients of donations and grants, while for-profits are paid in dividends. How Fiscal and Monetary Policy Affects the Economy
Fiscal policy can either make or break a business. It behooves a region or locality to help a business become a success. This means creating a...
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