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The Business Environment

Business 100

July 23, 2012
The Business Environment
A business environment is an environment in which business is conducted. It is also a working climate created by distinct forces: internal and external forces which make up an operating environment. The role of business in the economy is to act as a vehicle for economic progress. In an economy, business plays a pivotal role of acting as the main factor. Businesses include manufacturing, health care, wholesale, retail and services which help the economy to propel, survive and maintain the people that control it. This role depends upon business enterprises operating within the framework of a competitive market economy.
To compare and contrast the roles of profit and non-profit organizations in the economy, one has to understand the meaning of profit. In business, profit is a word used to describe earnings. It is the difference between the revenues gained and the expenses incurred from business activities. A for profit business provides and/or exchanges goods and services for a price. A firm or company is in business to make profits or the business fails. When companies earn huge profits, it enables them to invest in research and development, company shareholders are rewarded and other firms are attracted in the industry. On the contrary, the main strength of nonprofit is its efficiency in meeting consumer demands at minimum cost. Nonprofits organizations can be profitable but are restricted in how they distribute their profits. They cannot pay out profits to shareholders like the for-profit organizations or firms. Some sources of cost savings for nonprofit is through work performed by volunteers, tax deductible contributions by taxpayers and direct government assistance.
Monetary policy impacts the economy through the prices levy on goods on the local market, money exchange rates

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