Question

Statement I: Business is regarded as an economic activity.

Statement II: The objective of business activities is to sell the goods and services for profit.

Options

• Both I and II are wrong.

• I is correct and II is wrong.

• Both I and II are correct but II is not an explanation of I.

• Both I and II are correct and II is an explanation of I.

Answer 1

Both I and II are correct and II is an explanation of I.

Explanation:

Statement I is correct because business is indeed regarded as an economic activity, as it involves the production and distribution of goods and services with the aim of earning income. Statement II is also correct because the main objective of business activities is to sell goods and services for profit. Statement II further explains Statement I, as the goal of earning profit is what drives the economic activities of business. Therefore, both statements are correct, and Statement II explains the purpose behind the economic nature of business.